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66th CONGRESS 1 SENATE COMMITTEE PRINT 

1st session I 



ECONOMIC CLAUSES 



PROVISIONAL DRAFT 

OF THE 

ECONOMIC CLAUSES OF THE TREATY OF PEACE 
WITH GERMANY 

WITH EXPLANATORY HEADINGS AND MARGINAL COMMENTS 
FOR THE USE OF THE AMERICAN DELEGATES 

PRESENTED TO THE 

SENATE COMMITTEE ON FOREIGN RELATIONS 

BY 

HON. BERNARD BARUCH 




^-Z6 '5(^^ 



Printed for the use of the Committee on Foreign Relations 



WASHINGTON 

GOVERNMENT PRINTING OFFICE 

1919 



^^^^^ 



This is not the final text nor is the numbering or lettering that of the treaty. 



n. of B. 

FEB 3 1920 



ECONOMIC COMMISSION. 



Draft of Clauses for the Treaty With Germani. 

Part I. Commercial relations. 

Chapter A. Customs reouhitions. duties, and restrictions. 

Chapter B. Shipping. 

Chapter C. Unfair competition. 

Chapter D. Treatment of nationals of allied and associated powers in 
ex-enemy countries. 

Chapter E. General articles. 
Part II. Revival or abrogation of economic treaties. 
Part III. Debts. 

Part IV. Property, rights and interests. 

Part V. Contracts, prescriptions judgments, mixed arbitral tril)unals. 
Part VI. Industrial property. 



ECONOMIC COMMISSION. 



DRAFT OF CLAUSES TO BE INSERTED IN THE TREATY WITH 
GERMANY. 

Part I. 

COMMERCIAL RELATIONS, CUSTOMS DUTIES, SHIPPING, 
UNFAIR COMPETITION, TREATMENT OF NATIONALS. 

SUMMARY OF CHAPTER A— CUSTOMS REGULATIONS, DUTIES AND RESTRICTIONS. COMMENTS. 
CONTENTS. 

MEMORANDUM BY AMERICAN DELEGATES. 

As regards customs tariffs, the proposed arrangement is that for a 
period of six months, Germany shall impose no duties higher than the 
lowest duties in force in 1914. After these six months she is free to 
do as she pleases, subject however, for a limited period, to giving 
most-favored-nation treatment to the Allies, and in general to discrim- 
inating in no way against the Allies. This requirement of most- 
favored-nation treatment has no counterpart in the form of any 
requirement imposed on the Allies to give Germany most-favored- 
nation treatment. Hence at the close of five years Germany is left 
free The belief is that during that five year period things wall settle 
down, and reasonable commercial arrangements will be made between 
Germany and other countries. 

Similar stipulations, favorable for the Alhes, are made for vessels, 
transit duties or charges, and the hke. Here too, a limit of five years 
is set for the unilateral obhgation imposed on Germany, m the ex- 
pectation that reasonable reciprocal relations will be restored. 

The five year periods in these cases are subject to modification by 
the League of Nations, under conditions somewhat different m the 

two sets of cases. „ ,,. , ^ ■ ^i 

As re<rards treatment of the nationals of allied countries, the pro- 
visions in general are such as are contained in the usual commercial 
treities Here again they are unilateral, the obligations restuig ui)on 
Germany alone. Hence in this case also they are imposed for a 
period of five years (subject to modification by the League of Nations) 
in the expectation that at the end of the five years matters ol this 
s(irt will be adjusted in the usual way. 

1 The German Govermnent undertakes that goods the of^^years^L^-" 
produce or manufacture of any one of the Allied or Asso- l^-„^„^/f^?/^ 
ciated States imported into German territory as deter- (fif,y/,'%^. ^• 
mined by the Peace Conference, from whatsoever place 
5 



Equality of 
Duties for all 
States. 



STTMMABY OF 
CONTENTS. 



ECONOMIC CLAUSES. 



COMMENTS. 



No discrimina- 
tion by indirect 
methods. 



No discrimina- 
tion as regards 
ejrported goods. 



To cease at end 
of 5 years un- 
less League of 
Nations acts 
(See article 1, 
Chapter Ei. 



arriving, shall not be subjected to other or higher duties or 
charges (including internal charges) than those to which 
the like goods the produce or manufacture of any other 
such State or of any other foreign country are subject. 

The German Government will not maintain or impose 
any prohibition or restriction on the importation into 
German territory, as defined above, of any goods the prod- 
uce or manufacture of the territories of any one of the 
Allied or Associated States, from whatsoever place arriv- 
ing, which shall not equally extend to the importation of 
the like goods the produce or manufacture of any other 
such State or of any other foreign country. 

2. The German Government further undertakes that, 
in the matter of the regime applicable on importation, no 
discrimination against the commerce of any of the various 
Allied and Associated States as compared with any other 
of the said States or any other foreign country shall be 
made, even by indirect means, such as Customs regulations 
or procedure, methods of verification or analysis, condi- 
tions of payment of duties, tariff classification or interpre- 
tation, or the operation of monopolies. 

3. In all that concerns exportation the German Gov- 
ernment undertakes that goods, natural products or manu- 
factured articles, exported from German territory to the Chapter e 
territories of any one of the Allied or Associated States 

shall not be subjected to other or higher duties or charges 
(including internal charges) than those paid on the like 
goods exported to any other such State or to any other 
foreign country. 

No prohibition or restriction shall be maintained or 
imposed on the exportation of any goods sent from Ger- 
man territory to any one of the Allied or Associated 
States which shall not equally extend to the exportation 
of the like goods, natural products or manufactured 
articles, sent to any other such State or to any other 
foreign country. 



To 



at end of 
5 years unless 
League of Nations 
acts (See article 1, 



KfONOiMIC CLAI'SE? 



COMMENTS. 



All favors to be 
granted equally. 



No discrimina- 
tion in duties 
because of ship- 
ping or transit. 



Alsace-Lorraine 
products free in- 
to Germany for 
5 years. 



Alsace textiles 
to move freely 
for finisMng 
operations. 



4. Every favor, iimnunity, or privilege in regard to the 
importation, exportation or transit of goods granted by 
(lemiany to any Allied or Associated State or to any other 
foreign countiy whatever shall simultaneously and un- 
conditionally, without request and without compensation, 
he extended to all the Allied and Associated States. 

5. Duties, charges and prohibitions relating to impor- 
tations into or exportations from German territory shall 
he without discrimination or preference, direct or indirect, 
based on the Hag or ownership of the cariying vessel or 
aircraft, on the original or immediate place of departure of 
the vessel or aircraft, on its ultimate or intermediate desti- 
nation, or whether any intermediate port through which 
the goods are imported or exported is a German port or 
a port ])elonging to any foreign countiy, on the particular 
IVontier across which they enter or leaAC German terri- 
tory, or whether they are imported or exported by sea or 
by land or by air. 

0. By way of exception to the preceding provisions : — 

(a) For a period of five years from the date of the rati- 
fication of the present Treaty, natural or manufactured 
products which both originate in and come from the 
territories of Alsace and Lorraine reunited to France shall, 
on imj)ortation into German Customs territory, be exempt 
tVom all Customs duty. 

The French Government shall fix each year, by decree 
communicated to the German Government, the nature 
and amount of the products v\'hich shall enjoy this ex- 
emption. 

The amount of each product which may be thus sent 
annually into Germany shall not exceed the average of 
the amounts sent annually in the years 1911-1913. 

Further, during the period referred to, the German 
Government undertakes to allow the free export from 
Germany, and the free re-importation into Germany, 
exempt from all Customs duties and other charges (in- 
cluding internal charges), of yarns, tissues, and other 
textile materials or products of any kind and in any con- 
7 



To cease at end of 
5 years unless 
League of Nations 
acts (See article 1, 
Chapter E). 



To continue after 
the 5 years until 
League of Nations 
acts. 

A concession to 
the Belgians, who 
are uneasy about 
Antwerp (See 
article 1, Chapter 
E). 



Automatically 
ends after 5 
years. 



Automatically 
ends after 5 
years. 



ECONOMIC CLAUSES. 



COMMENTS. 



Polisli products 
free into Ger- 
many for 3 
years. 



Luxemburg case 
reserved. 



Lowest duties of 
1914 to remain 
in force for 6 
months. 



Certain other 
duties to remain 
unchanged for 
30 months more. 



ditiou, sent from Germany into the territories of Alsace 
or Lorraine, to be subjected there to any finishing process, 
such as bleaching, dyeing, printing, mercerization, gas- 
sing, twisting, dressing, etc. 

(b) During a, period of three years from the date of the t^^^^^jj^^/'g^^ 
ratification of the present Treaty, natural or manufactured y^"''- 
products which both originate in and come from Polish 
territories which before the war were part of Germany 

shall, on importation into German Customs territory, be 
exempt from all Customs duty. 

The Polish Government shall fix each year, by decree 
communicated to the German Government, the nature and 
amount of the products which shall enjoy this exemption. 

The amount of each j)roduct which may be thus sent 
annually into Germany shall not exceed the average of 
the amounts sent annually in the years 1911-1913. 

(c) The Allied and Associated States reserve the right 
to require Germany to accord freedom from Customs duty, 
on importation into German Customs territory, to natural 
products and manufactured articles which both originate 
in and come from the Grand Duchy of Luxemburg, for a 
period of five years from the ratification of the present 
Treaty. 

The nature and amount of products which shall enjoy 
the benefits of this regime shall be communicated each 
year to the German Government. 

The amount of each product which may be thus sent 
annually into Germany shall not exceed the average of the 
amounts sent annually in the years 1911-1913. 

7. During the first six months following the ratification 
of the present Treaty, the duties imposed by the German 
Government on imports from Allied and Associated 
Nations shall not be higher than the m^st favorable duties 
which were applied to imports into Germany on the 31st 
July, 1914. 

During a further peril d cf thirty months after the 
expiration of the first six months, this disposition shall 
continue to be ai)plied exclusively with regard to products 



to 
certain countries 
(especially 
Italy) who fear 
the imposition 
by Germany of 



ECONOMIC CLAUSES. COMMENTS. 

which, lieing- comprised in Section A of the First C'ateffoiy vengemi duties 

^ ^ ^ on some products 

of the German Customs Tariff of the 25th December, 1902, dependent on 

particularly 

enioved at the above-mentioned date rates conven- the German 

"^ •' market 

tionalized by Treaties with the Allied or Associated Automatically 

•' ends after 3 

States, with the addition of all kinds of wine and vege- years List of 

' '^ Articles affected 

table oils, of artificial silk and of washed or scoured wool, ^y the provision 

IS appended. 

whether or not they were the subject of special Conven- 
tions before the 31st July, 1914. 
Beservation as to 8. The Allied and Associated States reserve the right 

occupied regions. , , ^ ... ■ ^ ^ ^i ■ ^ 

to apply to Gennan territory occupied by their trooi)s a 
special Customs regime as regards imports and exports, in 
the event of such a step being necessaiy in their opinion 
in order to safeguard the economic interests of the popu- 
lation of these territories. 

Chapter B — Shipping. 

National treat- 1, Ships aud boats of all kinds belonging to the xVllied to continue 

ment for ships ^ , , 7i p 1 1 *"er the 5 

ofAUies. or Associated States shall eniov in all German ports lull years until the 

" , League of Na- 

national treatment. In particular, the ships and boats tionsacts. a 

^ 11 1 concession to 

of any one of the Allied or Associated States shall be the Belgians, as 

'' in the case of 

entitled to transport goods of any description and pas- *'*^'=ig«^^jg ^ 
sengers to or from any ports or places in German territoiy ^napt^e^rE^ ^^ ^ 
to which German ships may have access, under conditions cation of articles 

^ •' contained in the 

which shall not be more onerous than those applying m draft of the 

11./ ,o^ Commission on 

the case of national ships, and shall be treated on a footing Ports: m part 

^ inconsistent 

of equality with national ships as regards port and harbor ^^J^^''^^^^ 
facilities and charges of eveiy description, including facili- ^^p^'^'^^^^'J'"^ ^^^^_ 
ties for stationing, loading and unloading, and duties and ^^^^^"^ j^J|J! ^^^ 
charges of tonnage, harbor pilotage, lighthouse, quaran- ^""^^^^^"^'g'j^ ^^, 
tine and all analogous duties and charges of whatsoever tention. 
nature, levied in the name or for the profit of the Govern- 
ment, public functionaries, private individuals, corpora- 
tions or establishments of any kind. 

In the event of the German government granting a 
preferential regime to any of the Allied or Associated 
States, or to any other foreign country, this regime shall 
be extended immediately and unconditionally to all the 
Allied and Associated States. 

1303.58—19 2 9 



ECONOMIC CLAUSES. 



COMMENTS. 



Most favored 
nation treatment 
for fishing and 
coasting vessels. 



Police of North 
Sea fisheries. 



iawn o-p To cease at end 
i.uvvaj,o, of the 5 years 



Registry of ships 
of countries 
having no sea- 
coast. 



Permanent. 



2. As regards fishing, coasting trade, and 
ships and boats of the Allied and Associated States shall ^ft^'L^'cT' °^ 
enjoy, even in German territorial waters, the treatment ^^if^^pfe^E,^ ^• 
accorded to ships and boats of the most favored nation. ais'o'c^ered'L 

Part n, Article D. The duplication will be eliminated in the final draft. 

3. The Gennan Government agrees that, notwithstand- 
ing any stipulation to the contrary contained in the Con- 
ventions relating to the North Sea Fisheries and Liquor 
Traffic, all rights of inspection and police shall, in the case 
of fishing boats belonging to the Allied Powers, be exer- 
cised by ships belonging to those Powers.* 

4. In the case of ships and boats belonging to the Allied 
or Associated States, all classes of certificates or docu- 
ments relating to the vessels, which were recognized as 
valid by Germany before the war, or which may hereafter 
be recognized as valid by the principal maritime States, 
shall be recognized by Germany as valid and as equivalent 
to the corresponding certificates issued to German vessels. 

A similar recognition shall be accorded to the certifi- 
cates and documents issued to their vessels by the Govern- 
ments of new States, whether they have a sea-coast or 
not. Such certificates and documents shall be issued in 
conformity with the general principles observed in the 
principal maritime States. 

5. The vessels of any Allied or Associated State which 
has no sea-coast shall be registered at some one sjjecified 
place situated in its territory, which place shall serve as 
their port of registry ; the High Contracting Parties agree 
to recognize the international validity of the flag flown 
by vessels so registered. 



Chapter C — Unfair Competition. 



False wrappings 
and markings 
to be suppressed 
by German 
Government. 



1. The German Government engages itself to take all "^^^^ '^ in accord 

* ° with the Madrid 

the necessary legislative and administrative measures to convention and 

"^ " not to be 

protect goods, the produce or manufacture of any one of ^po^ed, even 
the Allied or Associated States from all forms of unfair ^^^^^^ ^o not 

, , , . here enter on 

competition in commercial transactions. any reciprocal 

•^ engagement. The 

important Allied countries already reciprocate. 
*This article is covered by Article D in Part II, relating to Re\dval or Abrogation 
of Economic Treaties. 

10 



ECONOMIC CLAUSES. 



COMMENTS. 



Germany to en- 
force regional 
appellation of 
wines and spirits 
as settled by 
other states. 



The GeiTaan Government undertakes to prohibit and 
repress by seizure and by other appropriate remedies the 
importation, exportation, manufacture, distribution, sale 
or offering for sale in the interior of all goods bearing upon 
themselves or their usual get-up or wrappings any marks, 
names, devices, or descriptions whatsoever which are 
calculated to convey directly or indirectly a false indication 
of the origin, type, nature, or special characteristics of 
such goods. 

2. The German Government undertakes to respect any 
law or any administrative or judicial decision given in 
conformity with such law in force in any Allied or Asso- 
ciated State and duly conmiunicated to it by the proper 
authorities defining or regulating the right to any regional 
appellation in respect of wine or spirits produced in the 
State to which the region belongs or the conditions 
under which the use of any such appellation may be per- 
mitted; and the importation, exportation, manufacture, 
distribution, sale or offering for sale of j)roducts or arti- 
cles bearing regional appellations inconsistent with such 
law or order shall be prohiluted by the German Govern- 
ment and repressed by the measures prescribed in the 
preceding article. 

Chapter D — Treatment of "Nationals of Allied 
AND Associated Powers in ex-Enemy Countries. 



The U. S. Dele- 
gation entered 
reservation on 
the ground that 
the matter is one 
for general 
international 
action. France 
has enacted 
laws by which 
a corresponding 
obligation is 
imposed on her 
own subjects 
between them- 
selves. 



National treat- 
ment as regards 
occupations. 



No indirect 
evasion. 



1. Germany undertakes : 

(a) Not to subject the nationals of the Allied and 
Associated Powers to any prohibition in regard to the 
exercise of occupations, professions, trade and industry, 
which shall not be equally applicable to all aliens with- 
out exception. 

(b) Not to subject the nationals of the Allied and 
Associated Powers in regards to the rights referred to in 
paragraph {a) to any regulation or restriction which 
might contravene directly or indirectly the stipulations 
of the said paragraph, or which shall be other or more 

11 



Majority voted 
that these re- 
strictions should 
continue after 
the 5 years until 
League of Na- 
tions acts 
(See article 1, 
Chapter E). 

TJ. S. reserva- 
tion that these 
restrictions 
should cease 
after the 5 years 
unless League of 
Nations acts 
(See article 1, 
Chapter E). 



SUMMARY OF 
CONTENTS. 



National treat- 
ment as regards 
taxes. 



National treat- 
ment in general. 



ECONOMIO CLAUSES. 



COMMENTS. 



General 
Protection 
Recognition of 
new nationalities 
and their 
naturalization 
laws. 



Consuls and 
Consular agents 
to be admitted. 



disadvantageous than those which are applicable to aliens 
nationals of the most-favored nation. 

(c) Not to subject the nationals of the Allied and 
Associated Powers, their property or interests to any 
charges, tax or impost, direct or indirect, other or higher 
than those which are or may be imposed on its own 
nationals or their goods or interests. 

(d) Not to subject the nationals of the Allied and 
Associated Powers to any restriction which was not 
applicable on July 1, 1914, to the nationals of such 
Powers, unless such restriction is likewise imposed on its 
own nationals. 

2. The nationals of the Allied and Associated Powers Permanent, 
shall enjoy in German territory a constant protection for 

their persons and for their property and interests, and 
shall have free access to the Courts of Law. 

3. Gennany undertakes to recognize any new nation- ^^n^an^'i*- 
ality which has been or shall be acquired by its nationals 

under the laws of the Allied and Associated States and 
in accordance with the decisions of the competent author- 
ities of these States, pursuant to naturalization laws or 
under treaty stipulations, and to regard such persons as 
having, in consequence of the acquisition of such new 
nationality, in all respects severed their allegiance to 
their country of origin. 

4. The Allied and Associated Governments may ap- permanent, 
point consuls-general, consuls, vice-consuls, and consular 
agents in the towns and ports in German territory. The 
German Govermnent undertakes to approve the designa- 
tion of the consuls-general, consuls, vice-consuls, and 
consular agents whose names shall be notified to it and 

to admit them to the exercise of their functions in con- 
formity with the usual rules and customs. 



Chapter E — General Articles. 



Period of time 
during which 
certain of the 
preceding obliga- 
tions shall re- 
main in effect. 



1. The obligations imposed on Germany by Chapter ^, s- delegation 

insertion 
Article 1 

B above shall cease to have effect five years from the chapter d. 
12 



SUMMABY OF 

CONTEN S. 



ECONOMIC CLAUSES. 



COMMENTS. 



German Govern- 
ment, when 
acting as a 
trader, to have 
no immunity as 
a sovereign. 



date of ratification of the present Treaty, unless otherwise 
provided in the text, or unless the Council of the League 
of Nations shall, at least twelve months before the expir- 
ation of that period, decide that these obligations shall 
be maintained for a further period wdth or without 
amendment. 

Article 5 of Chapter A shall remain in operation even msa^gre'^sft'"" 
after the period of five years unless revised by the Council Tot'cha^tM '^ 
of the League of Nations; and the same shall apply to teinraiaTttis 
Article 1 of Chapter B and Article 1 of Chapter D 

2. If the German Government engages in international 
trade, it shall not in respect thereof have or be deemed to 
have any rights, privileges or immunities of sovereignty . 



provision should 
not apply to 
Article 1 of Chapter D. 



13 



iPAKT II. 

REVIVAL OR ABROGATION OF ECONOMIC TREATIES. 

Chapter A — Multilateral Conventions. comments. 

MEMORANDLTVI BY AMERICAN DELEGATES. 

The provisions in Part II raise few contentious questions. It is 
fii-st provided that a considerable number of multihiteral treaties, on 
matters of concern to all countries, and not political in character, 
shall be reviewed; such as postal, (clci^raph, sanitary conventions. 
The existing public international unions, which may at some future 
date be placed under the League of Nations, rest at present upon 
these conventions. Regarding some minor conventions to which 
Germany is asked to adhere, the United States has entered reserva- 
tions (see Article K.). It is proposed in Article H to relieve China 
from the obligation to i)ay to Germany the instalments still due under 
the Pekin Treaty of 1901, by which China was compelled to pay 
indemnities for the Boxer rebelhon. 

Bilateral Treaties may also be revived by the AlUed States, who are 
given six months in which to make the necessary notification to Ger- 
many. These treaties likewise are as a rule oil non-contentious 
matters; and in any case, if their revival proves unwelcome to Ger- 
many, they can usually be denounced by her on twelve months' 
notice. 

At the close of the Part are certain Articles, — M, N, O, P, Q, — by 
which treaties which Germany has made during the war with other 
enemy countries are abrogated, and by which the situation is cleared 
in other ways of the efl'ects of enemy war policies. 

Multilateral Treaties. 
Article A. 

From the date of bringing into force the present Treaty, 
the multihxteral Treaties, Conventions and Agreements 
enmnerated below and in the subsequent Articles shall 
alone* be applied as between Germany and those of the 
Allied and Associated Powers party thereto : — 

1. O'onventions of the 14th March, 1884, 1st Decern- tj. s.aparty. 
bar, 1886, and 23rd March, 1887, and Final Protocol of 
the 7th July, 1887, regarding the Protection of Subma- 
rine Cables. 

* Except for any Treaties the revival of which may be provided for elsewhere in 
the Treaty of Peace. 

14 



SUMMABY OF 
CONTENTS. 



ECONOMIC CLAUSES. 



Relations re- 
established in 
respect of multi- 
lateral conven- 
tions and 
International 
unions. 



COMMENTS. 

European. 



IT. S. a party. 



2. Convention of the 11th October, 1909, regarding the 
International C'ireiihition of ]\Iotor-cars. 

3. Agreement of the 15th ^fay. 1886, regarding the European, 
sealing of Railway trucks subject to Customs Inspection, 

and Protocol of 18th May, 1907. 

4. Agreement of the 15th May, 1886, regarding tlie European. 
technical standardization of Raihvays. 

5. Convention of the 5th July, 1890, regarding the us. a party. 
publication of Customs Tarifl's and the organization of an 
International Union for the publication of Customs Tariffs. 

6*. Convention of the 81st December, 1913, regarding European. 
the unification of Commercial Statistics. 

7. Convention of the 25th April, 1907, regarding the European, 
raising of the Turkish Customs Tariff. 

8. Convention of the 14th March. 1857. for the redemp- 
tion of toll dues on the Sound and Belts. 

9. Convention of the 22nd June, 1861, for the redeni])- 
tion of the State Toll on the Elbe. 

10. Conventions of the 16th July, 1863, for the redemp- 
tion of the Toll dues on the Scheldt. 

11. Convention of the 29th October, 1888, regarding 
the establishment of a definite arrangement guamnteeing 
the free use of the Sue;': Canal. 

12. Conventions of the 23rd Sej)tend)er, 1910, respect- 
ing the unification of certain regulations regarding colli- 
sions and salvage at sea. 

13. Convention of the 21st December, 1904, legarding European. 
the exemption of hospital shii)s from dues and charges in 
ports. 

14. Convention of the 4th February, 1898, regarding European, 
the tonnage measurement of vessels for inland naviga- 
tion. 

15. Convention of the 26th September, 1906, for the European, 
suppression of night-Avork for women. 

16. Convention of the 26th September, 1906, for the u. s. a party. 
suppression of the use of white phosphorus in the manu- 
facture of matches. 



tJ. S. a party 
to the salvage 
convention 
treaty only. 



TJ. S. a party. 



15 



SUMMARY OF 
CONTENTS. 



ECONOMIC CLAUSES. 



COMMENTS. 



Re-admission of 
Germany into 
Postal and Tele- 
graphic Unions. 



17. Conventions of the 18th May, 1904, and the 4th ^- «• ^ P"*y- 
May, 1910, regarding the suppiession of the white slave 

traffic. 

18. Convention of the 4th May, 1910, regarding the ^- » « party. 
su])pression of obscene publications. 

19. Sanitary Conventions of Paris and Venice of the ^- s- a party. 
3rd April, 1894, 19th March, 1897, and 3rd December, 

1903. 

20. Convention of the 20th May, 1875, legarding the European. 
LinificatioD and improvement of the metric system. 

21. Convention of the 29th November, 1906, regard- European. 
ing the unification of pharmacopoeial formulee for potent 
drugs. 

22. Convention of 16th and 19th November, 1885, re- u. s. a party. 
garding the establishment of a concert pitch. 

23. Convention of the 7th June, 1905, regarding the European. 
creation of an International Agricultural Institute at 
Eome. 

24. Conventions of the 3rd November, 1881, and the European. 
15th April, 1889, regarding precautionary measures 
against phylloxera. 

25. Convention of the 19th March, 1902, regarding u. s. not a party. 
the protection of birds useful to agriculture. 

Article B. 

From the date of bringing into force the present Treaty 
the High Contracting Parties sliall renew, in so far as 
concerns them, the Conventions and Agreements herein- 
after mentioned, on condition that the stipulations con- 
tained in the present article are fulfilled by Germany. 
Postal Conventions: — 

Conventions and agreements of the Universal Postal ^- s- a party. 
Union concluded at Vienna, 4th July, 1891. 

Conventions and agreements of the Postal Union 
signed at Washington, 15th June, 1897. 

Conventions and agreements of the Postal Union 
signed at Eome, 26th May, 1906. 



16 



ECONOMIC CLAUSES. 



COMMENTS. 



Germany to 
conclude recipro- 
cal postal and 
telegraphic 
agreements with 
the new states. 



Eadio- 

telegraphic 

convention. 



Germany to 
agree to adhere 
to new 
convention. 



Telegraph ic Conventions : — 

International Telegraphic Conventions signed at St. u- s. not a partj 
Petersburg 10, 22 July, 1875. 

Regulations and Tariffs drawn up by the Interna- ^- ^- "°' * !""'= 
tional Telegi-apliic Conference, Lisbon. June 11th, 1908. 
Gennany undertakes not to refuse her assent to the con- 
clusion by the new States of the special arrangements 
referred to by the- Conventions and Agreements relating 
to the Universal Postal Union and to the International 
Telegraphic Union, to which the said new States adhered 
or may adhere. 

Article C. 

From the date of bringing into force the present us. a party. 
Treaty, the High Contracting Parties shall renew, in so 
far as concerns them, the International Kadio-Telegrai)hic 
Convention of the 5th July, 1912, on condition that 
Gennany fulfils the provisional regulations which sliall l)c 
indicated to her by the Allied and Associated PoA\ers. 

When a new Convention regulating international radio- Aueged to be 

° ^ necessary for 

telegraphic conmiunications shall have been concluded to military reasons. 
take the place of the Convention of the 5th July, 1912, 
this new Convention shall bind Germany even should the 
said Power have refused either to take part in the drawing 
up of the Convention, or to subscribe thereto. 

This new Convention shall like^^^se replace the pro- 
visional rules in force. 



Article D. 



North Sea 
Fisheries. 



From the date of the bringing into force the present 
Treaty, the High Contracting Parties shall renew, in so 
far as concerns them, under the condition stipulated in 
the last paragraph of the. present Article, the Conventions 
hereinafter mentioned : — 

{!.) Conventions of the 6th May, 1882, and the 1st European. 
Febmaiy, 1889, regulating the Fisheries in the North 
Sea outside territorial waters. 



130358—19 3 



17 



SUMMARY OF 
CONTENTS. 



North Sea 
Liquor Traffic. 



ECONOMIC CLAUSES. 



COMMENTS. 



(■J.) The (V)nventioiis and Protocols of tho 16th No- European, 
vember, 1887, 14th February, 1893, and 11th April, 
1894, regarding the North Sea liquor traffic. 

The German Government agrees that notwithstanding 
any stipulation to the contrary contained in the said 
Conventions all rights of inspection and police shall, in 
the case of fishing hoats belonging to the Allied Powers, 
he carried out only by vessels belonging to these Powers. 

[This right of inspection, how^ever, shall cease at the ^j^^g^j™^""^ 
end of five years from the date of ratification of the pres- brackets has 

. been agreed 

ent Treaty, unless the Council of the League of Nations ^p"»_i'y «iie 



shall, at least 12 months before the expiration of that commission, 

' ^ though inserted 

period, decide that it shall be maintained for a further in another 

-I ' Blace in the 



period, with or without amendment.] 
Article E. 



See Part I, Ch. B, Article 3. 



Patents, 
copyrights, 



European 
Railway 
Union. 



Compare the 
sections of this 
draft which 
deal with 
Unfair Competi- 
tion and with 
Industrial 
Property, 
Part I, ch. C, 
and Part VI., 
ch. I. Duplica- 
tions will be 
eliminated. 
U. S. a party to 
(1) and (4). 



The International Convention of Paris of the 20th 
March, 1883, for the protection of industrial property, 
revised at Washington on the 2nd June, 1911 ; the agree- 
ment of the 14th April, 1891, regarding the suppression of 
false indications of origin of goods ; the agreement of the 
14th April, 1891, concerning the international registra- 
tion of trade marks ; and the International Convention of 
Berne of the 9th September, 1886, for the protection of 
literary and artistic works, revised at Berlin on the 13th 
November, 1908, shall again be put into full force and 
effect as from date of bringing into force the present 
Treaty, in so far as they are not affected or modified by the 
exceptions and restrictions resulting from the said Treaty. 

Article F. 

From the date of bringing into force the present Treaty, u- «• «<>* a party, 
the High Contracting Parties shall renew, in so far as con- 
cerns them ana under the reserv^ations indicated in the 
second paragraph of the present Article, the Conventions 
and arrangements signed at Berne on the 14th October, 
1890, the 20th September, 1893, the 16th July, 1895, 



18 



ECONOMIC CLAUSES. 



COMMENTS. 



Chinese tariff. 



Whang-Poo 
Conservancy 



the 16 June, 1898, and the 19tli September, 1906, regard- 
ing the transportation of goods by rail. 
When a new Convention for the transportation of u. s. not 

a party. 

passengers, luggage and goods by rail shall have been Drafted by 
concluded to replace the Berne Convention (14th Octo- Ports, water- 

^ ways and Rail- 

ber, 1890) this new Convention shall bind Germany even ways, and pro- 

' ' , '^ posed by that 

if the said Power shall have refused either to take part commission. 
in the preparation of the Convention or to subscribe 
thereto. 

Article G. 

From the date of bringing into force the ])resent Treaty, 
the High (Contracting Parties shall renew in so far as 
concerns them: — 

(1.) The arrangement of the 29th August. 1902. re- u. s. a party, 
garding the Xew Chinese Customs Tariff. 

(2.) The ariangement of the 27th September, 1905. ^ s. a party. 
regarding Whang-Poo, and the provisional sui)plenientary 
arrangement of the 4th Aj)ril, 1912. 

C'hina, however, is no longer bound to grant to Ger- 
many the advantages or privileges which she allowed 
Germany under these arrangements, and which she has 
annulled as fiom the rui)ture of dii)lomatic relations. 

Article H. 



Protocol of 
Peking. 



Germany renounces all claims to all benefits and priv- Affects the 
ilegcsunderthepiovisionsof the Final Protocol signed at indemnity. 
Peking on 7th September, 1901, and likewise to all in- 
demnities accruing under the said Protocol subsecpient 
to 14th Maich, 1917. 

Article I. 

From the date of bringing into force the present Treaty, European. 
the High Contracting Parties shall renew, in so far as 
concerns them, the Hague Convention of the 17th July, 
1905, relating to civil procedure. 

This renewal, however, does not and shall not apply to 
France, Portugal and Roiunania. 
19 



SUMMARY OF 
CONTENTS. 



National 
treatment of 
German trade in 
Samoa to 
terminate. 



Treaties 
Germany is 
asked to sign. 



Revival of bi- 
lateral treaties 
with Germany. 



ECONOMIC CLAUSES. COMMENTS. 

Article J. 

The special rights and privileges granted to Germany by J^^^'j^^^^J*^' 
Article III of the Convention of 2nd December, 1899, re- ^. s. and Great 

Britain, were 

lating to Samoa, shall terminate at the date of bringing incidental to the 



into force the present Treaty. 

Article K. 

Gemiany undertakes to adhere to the Treaties, Conven- 
tions or Agreements hereinafter mentioned or to ratify 
them : — 

(1.) Convention of the 23rd January, 1912, signed at 
the Hague, regarding opium, morphine and cocaine. 

(2.) Act and Protocol of the 20th March, 1914, relating 
to the protection of literary and artistic works. 

(5.) Convention of the 4th March, 1914, regarding the 
diseases' of plants. 

{4.) Convention of the 16th October, 1912, for a uni- 
fomi system of giving the results of analysis of food stuffs 
for human beings and animals. 

(5.) Convention of the 16th October, 1912, for a perma- 
nent International Bureau of Analytical Chemistry con- 
cerning food stuffs for human beings and animals. 

Bilateral Treaties. 
Article L. 

Each of the Allied or Associated Pov^^ers, being guided 
by the general principles or special provisions of the 
present Treaty, shall notify to Germany the bilateral 
Treaties or Conventions which such Allied or Associated 
Power wishes to revive with Germany. 

The Allied and Associated Powers undertake among 
themselves not to revive with Gennany any Conven- 
tions or Treaties which are not in accordance with the 
tenns of the present Treaty. In case of differences of 
opinion the League of Nations wdll be called upon to 
decide. 



Samoan 
adjustment 



Already signed, 
but not ratified 
by Germany. 



U. S. a party. 



TJ. S. not a party. 



U. S. not a party. 
As regards the 
three last named 
Conventions, the 
United States 
delegation has 
made a reser- 
vation which 
it proposes to 
refer to the 
Council of Four. 



20 



ECONOMIC CLAITSES. 



COMMENTS. 



The notification referred to in the present article shall 
be made either directly or through the intemiediary of 
another Power. The receipt thereof shall be acknowl- 
edged in writing by Germany. The date of the revival 
shall be that of the notification. The notification shall 
mention any provisions of the said Treaties and Conven- 
tions which, not being in accordance with the temis of 
the present Treaty, shall not be considered as revived. 

A period of six months from the date of ratification of 
the present Treaty is allowed to the Allied and Asso- 
ciated Powers in which to make their notification. 

Only those bilateral Treaties and Conventions which a'"i° ^^^ ^^^^^^ 

'' Powers decide 

have been the subject of such a declaration shall be ^^^^| '/eaties 

"' _ _ shall be revived, 

revived between the Allied and xVssociated Powers and ^y ^^^ '""^^ of 

these Treaties, 

Geraiany ; all the others arc and shall remain abrogated. Germany wiu 

•' ' * still be able to 

denovmce most of them by giving twelve months' notice. 

The above reg-ulations apply to all bilateral Treaties or 
Conventions existing between any of the Allied and 
Associated Powers signatories to the ^jrcsent Treaty and 
Germany, even if the said Allied and Associated Powers 
have not l)een in a state of war with Germany. 

Article M. 



Enemy treaties 
entered into 
during the war 
are abrogated by 
this clause. 



Gemiany recognizes that all the Treaties, Conventions 
or Agreements which she has concluded with Austria, 
Bulgaria, Hungaiy or Turkey since the 1st August, 1914, 
until the bringing into force of the present Treaty are, and 
shall remain, abrogated by the present Treaty. 



Article X 



Most-favored- 
Nation treatment 
under pre-war 
enemy treaties. 



GeiTuany undertakes to secure, fully and uncoudition- u. s. reserves 

•^ '' privilege of 

ally, to the Allied and As^sociated Powers, and to the ofii- referring this to 

'' . the State De- 

cials and subjects of the said Powers, the enjojinent of all panmentfor 
the rights and advantages of any kind which she may have consideration, 
granted to Austria, Bulgaria, Hungaiy or Turkey, or to 
the ofiicials and subjects of these States, by Treaties, Con- 
ventions or Arrangements concluded before the 1st August, 



21 



SUMMARY OF 
CONTENTS. 



ECONOMIC CLAUSES. 

1914, SO long as these Treaties, Conventions, and Arrange- 
ments remain in force. 

The Allied or Associated Powers reserve the right to 
accept or not the enjoyment of these rights and advantages. 

Article 0. 



COMMENTS. 



Enemy treaties 
with Russia an( 
Roumania 
abrogated. 



Annuls conces- 
sions, etc. 
granted under 
pressure by 
Russia to 
Germany. 



Arrangements which she concluded with Russia, or with 
any State or Government of which the territory pre- 
viously formed a part of Eussia, or with Roumania, before 
the 1st August, 1914, or after that date until the putting 
into force of the present Treaty, are, and shall remain, 
abrogated. 

Article P. 

Should an Allied or Associated Power signatoiy to the 
present Treaty, or Russia, or a State or Government of 
which the territory formerly constituted a part of Russia, 
have been forced, since the 1st August, 1914, by reason 
of military occupation, or by any other means or for any 
other cause, to grant or allow to be granted by the act of 
any public authority, concessions, privileges and favors 
of any kind to a subject of Germany, such concessions, 
privileges and favors are fully and unconditionally an- 
nulled by the ])resent Treaty. 

No claims or indemnities which may result from this 
nullification shall be at the charge of the Allied and 
Associated Powers or of the Powers, States, Govern- 
ments or Public Authorities which are released from 
their engagements by the present Article. 



This abrogates 
all German 
treaties with 
Finland, as well 
as with the 
Ukraine. 



Most-favored 
Nation treat- 
ment under 
enemy treaties 
with neutrals 
during the war. 



Article Q. 

From the coming into force of the present Treaty, 
(Germany undertakes to enable the Allied and Associated 
Powers, and the subjects of the said Powere, to enjoy 
fully and unconditionally the rights and advantages of 
any kind which she has granted by Treaties, Conventions, 
or Arrangements to non-belligerent States, or the sub- 
22 



jects of these States, since the 1st August, 1914, until 
the bringing- into force of the present Treaty, so long as 
these Treaties, Conventions and Arrangements remain 
in force. 



Tlio Roumanian dologation put I'orwaid an additional aiticlo with 
a view to the abrogation of all the privilogos granted to the enemy 
powers or to enemy shipping companies in Danube ports. This article 
and an abstract from the note relating thereto are given in the gen- 
eral report. The Commission decided that it could not adopt^he 
Roumanian proposition but decided to call the attention of the Peace 
Conference to its importance. 

The Comniission considered another very important group of multi- 
lateral treaties which it was necessary to examine in view of their 
combined political and economic bearing. 

Tlie group in question comprised the Act of Algeciras, the Conven- 
tion of the 31st May, 1865, regarding the Cape Spartel Lighthouse, 
the General Act of the Brussels (\)nference of the 2nd July, 1890, the 
Declaration of the 15th June, 1910, amending the Declaration annexed 
to the General Act of Brussels, the Conventions of the 8th June, 1899, 
and 3rd Xovember, 1906, relating to the liquor traffic in Africa, the 
General Act of Berlin of 26th February, 1885, and the Conventions 
regarding the navigation of the Danube (Paris Treaty of the 30th 
March, 1856, Convention of the 28th March, 1866, Treaty of the 15th 
March, 1871, Treaty of Berlin of the 13th July, 1878, Treaty of the 
28th May, 1871 and 10th March, 1873). 

The Commission considered that if these various treaties and con- 
ventions requiring to be revised were not revived, the Peace Confer- 
ence should deal with the matter and take any necessary steps. As 
regards the Convention of the 31st May, 1865, regarding the Cape 
Spartel Lighthouse, the British Delegation expressed the desire that 
the examination of this instrument should not be overlooked by the 
competent Commission, and that in such examination the importance 
of the matter from the point of view of shipping, as well as its political 
aspect, should be borne in mind. The Commission recommended 
that this Convention should be revived except in so far as inconsistent 
with changes affecting the political status of Morocco. 

The Commission thought finally that the formulation of sugges- 
tions concerning treaties dealing with the conduct of hostilities, such 
as the Geneva Convention, the Hague Conventions, etc., did not come 
within its competence. 



23 



Paet III. 
DEBTS. 

SUMMARY OF MEMORANDUM BY AMERICAN DELEGATES. COMMENTS. 

CONTENTS. 

Article A and Regulation X provide for a system under which 
clearing offices are created, one between each Allied State and Ger- 
many, for the settlement of debts. In order to make the plan 
workable, it is provided that: 

(a.) Each State shall guarantee the payment of all debts owing by 
its nationals to nationals of the enemy State, except in cases of the 
insolvency of the debtor before the war; 

(b.) The proceeds of the sale of private enemy property in each 
State shall be used by the said State to pay the debts of its own 
nationals ; 

(r.) Debtors and creditors in States formerly enemy are forbidden to 
settle their debts with each other; or to communicate with each other 
regarding them. 

This plan may be desirable for Great Britam, but is extremely 
undesirable, if nor actually impossible for the United States. It is 
accordingly recommended that it be not accepted by the United 
States. 

1. Our Government should not accept the burden of guaranteeing 
the private debts owed by its citizens. This would be an obligation 
of unknown and probably very great proportions. 

2. The Treaty should not compel the United States to use the 
private property of Germans in our country for the payment of debts 
owed by other Germans to our citizens. To do so might amount to 
confiscation; moreover, Congress has expressly reserved to itself the 
power to decide what shall become of the enemy property in the 
United States. On the other hand, there seems no objection to the 
United States retaining the enemy property, for the present, as a 
hostage or pledge to secure American rights, and then deciding m its 
own way what is the fair and proper course. To accept the clearing 
house system would commit the United States to a course which, it is 
firmly believed. Congress will not wish to follow. 

3. To forbid our citizens from adjusting their debts and accounts 
with former enemies privately, would be a wholly unnecessary and 
unjustifiable interference with private affairs. It would be a most 
serious obstacle in the resumption of business and commercial rela- 
tions. Our financial houses and business firms had many complicated 
accounts, and transactions which were suspended by war. These 
houses, and especially the bankers, must speedily adjust their finan- 
cial accounts. Otherwise commerce cannot be properly resumed. 

24 



KCONOMIC CLAUSES. 



COMMENTS. 



The Clearing House plan would compel all such adjustments and all 
payments to be made through governmental agencies. 

As regards other countries than the United States, the adoption of 
the clearing house plan by some of them would be extermely detri- 
mental to their own interests, and might be ruinous to a nation whose 
balance of private debts was largely in favor of Germany. 

The principle is already accepted, Ai'ticle A, clause (e) that anj^ 
Allied State may exclude itself from the operation of the clearing 
house plan. 

Article A. 



Provides for 
clearing house 
system for the 
collection of 
debts, and the 
use of proceeds 
of enemy prop- 
erty. 



Prohibits allied 
and enemy 
nationals from 
settling their 
debts with each 
other, or even 
from communi- 
cating with each 
other about 



Debts iKiyal)le before the war and due by nationals of 
one of the Contracting States residing within the territoiy 
of such State to nationals of an opposing State residing 
within the territory of such State, interest which has be- 
come due during the war on Government securities and 
bonds redeemed during the war of which the payment to 
the nationals of that Government or neutrals has not been 
suspended during hostilities, and debts which have become 
payable during the war and arose out of transactions or 
contracts the total or partial execution of which was sus- 
pended at the date of the declaration of war, shall be 
settled through the intennediary of clearing offices to be 
established by each of the High Contracting Parties 
within three months of the coming into operation of the 
present Treaty. 

The proceeds of liquidation of enemy property, rights, 
and interests mentioned in Article B and Regulations Y 
will l^e accounted for through the clearing offices, and 
disposed of by them under the conditions provided In' the 
said article and regulations. 

The above-mentioned settlements shall be effected 
according to the following i)rinci})les and in accordance 
with Regulations X annexed hereto : — 

(a.) Each of the High Contracting Parties shall pro- 
hibit as from the coming into operation of the })resent 
Treaty, both the payment and the acceptance of payment 
of such debts, and also all conmiunications between the 
parties for the purpose of settlement of the said debts. 



Should not be 
adopted by 
U. S. 



U. S. delegate 
has notified 
other states 
that it could not 
accept this Art. 
A and Reg. X. 
No objections 
made, and 
clause (el per- 
mits any allied 
state to except 
itself. 



25 



SUMMARY OF 
CONTENTS. 

Requires each 
government to 
guarantee the 
payment of 
debts owed by 
its nationals to 
former enemy 
nationals. 



Permits any 
Allied state to 
decline to 
adopt Art. A 
and Reg. X. 



ECONOMIC CLAUSES. 

(/>.) Each of the High Contracting parties shall be 
respectively responsible for the payment of such debts 
due by its nationals, except in the cases where before the 
war the debtor was in a state of bankruptcy or failure, or 
had given formal indication of insolvency. Nevertheless, 
debts due by the inhabitants of territory invaded or 
occupied by the enemy before the annistice will not be 
guaranteed by the States of which those territories form 
part. 

(c.) The sums due to the nationals of one of the High- 
Contracting Parties by the nationals of the other will be 
debited to the clearing office of the country of the debtor 
and will be paid to the creditors by the clearing office of 
the country of the creditor. 

{(L) [Rate of Exchange.] * 

(e.) The provisions of Article A and Regulations X 
shall not apply as between Germany on the one hand and 
any one of the Allied or Associated States, their colonies 
or protectorates, or any one of the British Dominions or 
India on the other hand, unless within a period of six 
months from the coming into force of the present Treaty, 
notice to that effect is given to Gennany by the Govern- 
ment of such Allied or Associated State or of such Domin- 
ion or of India as the case may be. 

(/.) The Allied or Associated States who have adopted 
Article A and Regulations X may agree between them- 
selves to apply these Regulations to their respective 
nationals established in their territory so far as regards 
matters between nationals and German nationals. In 
this case the pa3Tiients made by application of this provi- 
sion will be subject to arrangements between the Allied 
and Associated offices concerned. 

*NoTE. — The Economic Commi?sion considers that the basis of tlierate of exchan£te 
for the operation of the clearing offices shall be fixed by tiie Financial Commission, 
and it has referred to that Commission the suggestions put forward by the different 
Delegations. 



COMMENTS. 



26 



ECONOMIC CLAUSES. COMMENTS. 

Regulations X. 

1. Each of the Hig-h ( 'ontracting- Parties Avill, within should not be 
three months of the cominsi; into operation of the present u. s. 
Treaty, establish a clearino' office for the collection and 
payment of enemy debts. 

Local clearing- offices may be estal)lished for any par- 
ticular portion of the territories of the High Contracting 
Parties. Such local clearing offices may perform all the 
functions of a central clearing office in their respective 
districts, except that all transactions with the clearing 
office in the enemy countiy must be effected through 
the central clearing office. 

2. In the present Regulations the debts referred to in 
the first paragraph of Article A of the present Treaty are 
described as "enemy debts," the persons from whom the 
same are due as "enemy debtors," the persons to whom 
they are due as "enemy creditors," the clearing office 
in the country of the creditor is called the "Creditor 
Clearing Office," and the clearing office in the countiy 
of the debtor is called the "Debtor Clearing Office." 

3. The High Contracting Parties will subject contra- 
ventions of paragraph (a) of Article A of the present 
Treaty to the same penalties as are at present provided by 
their legislation for trading with the enemy. They will 
similarly i)rohibit within their territoiy all legal process 
relating to payment of enemy debts, except in accordance 
with the provisions of the present Regulations. 

4. The (lovernment guarantee specified in paragraph 
(b) of Article A shall take effect whenever, for any reason, 
a debt shall not be recoverable, except in a case where, at 
the date of the outbreak of war the debt was barred 
by the laws of prescription in force in the country of the 
debtor, or where the debtor was at that time in a state of 
bankruptcy or failure or had given formal indication of 
insolvency. In such case the procedure specified by the 
present Regulations shall apply to payment of the divi- 
dends due or accruing due by the trustee. 

27 



ECONOMIC CLAUSES. 



COMMENTS. 



The temis "bankruptcy" and "failure" refer to the ap- 
plication of legislation providing for such juridical condi- 
tions, the expression "formal indication of insolvency" 
includes a similar juridical condition provided for in 
English law. 

5. Creditors shall give notice within six months to the 
Creditor Clearing Office of debts due them, and shall 
furnish the clearing office with any documents and in- 
formation required of them. 

The High Contracting Parties will take all suitable 
measures to trace and punish collusion between enemy 
creditors and debtors. The clearing offices will conmmni- 
cate to one another any evidence and information which 
might help the discovery and i)unishment of such col- 
lusion. 

The High Contracting Parties will facilitate as much 
as possible postal and telegraphic communications at the 
expense of the parties concerned and through the inter- 
mediary of the clearing offices between debtors and credi- 
tors desirous of coming to an agreement as to the amount 
of their debt. 

The Creditor Clearing Office will notify the Debtor 
Clearing Office of all debts declared to it. The Debtor 
Clearing Office will, in due course, inform the Creditor 
Clearing Office which debts are admitted and which debts 
are contested. In the latter case, the Debtor Clearing 
Office will give the grounds for the non-admission of the 
debt. 

6. When a debt has been admitted, in whole or in {^"^^ s"' ^^^^^ 
part, the Debtor Clearing Office will at once credit the 
Creditor Clearing Office with the amount admitted, and 

at the same time notify it of such credit. 

7. If, within the space of three months (unless the 
Creditor Clearing Office has agreed to an extension) the 
Debtor Clearing Office has not given notice whether the 
debt is or is not admitted, the debt shall be deemed to 
be admitted in full and shall be credited forthwith to 
the Creditor Clearing Office. 

28 



ECONOMIC CLALTSES. 

8. When the whole or part of a debt is not admitted 
the two clearing- offices will examine into the matter 
jointly and will endeavor to bring the parties to an 
agreement. 

9. The Creditor Clearing Office will pay to the indi- 
vidual creditor the sums credited to it out of the funds 
placed at its disposal by the Government of its country 
and in accordance with the conditions fixed by the said 
Government, retaining any sums considered necessary to 
cover risks, expenses or conmiissions. 

10. Any person having claimed pajmient of an enemy 
debt which is not admitted in whole or in part shall pay 
to the clearing office, by way of fine, interest at 5 per 
cent, on the part not admitted. Any person having 
unduly refused to admit the whole or part of a debt 
claimed from him shall pay, by way of fine, interest at 
5 per cent, on the amount with regard to wliich his 
refusal shall be disallowed. 

Such interest shall run from the date of expiration of 
the period provided for in paragraph 7 till the date on 
which the claim shall have been disallowed or the debt 
paid. 

Each clearing office shall in so far as it is concerned take 
steps to collect the fines above provided for, and will be 
responsible if such fines cannot be collected. 

The fines will be credited to the other clearing office, 
which shall retain them as a contribution towards the 
cost of carrying out the present regulations. 

11. The balance shall be struck monthly and the credit 
balance paid in cash by the debtor State within a week. 

Nevertheless, any credit balances which may be due 
by one or more of the Allied or Associated States shall be 
retained until complete payment shall have been effected 
of the smns due to the Allied or Associated States or their 
nationals on account of the war. 

12. To facilitate discussion between the Clearing Offices 
each of them shall have a representative in the town in 
which the other is established. 

29 



COMMENTS. 



SUMMARY OF ECONOMIC CLAUSES. COMMENTS. 

CONTENTS. 

13. Except for special reasons all discussions in regard 
to claims will, so far as possible, take place at the Debtor 
Clearing Office. 

14. In conformity with Article A, paragraph (b), the 
High Contracting Parties are responsible for the pay- 
ment of the enemy debts owing by their nationals. 

The Debtor Clearing Office will therefore credit the 
Creditor Clearing Office with all debts admitted, even in 
case of inability to collect them from the individual 
debtor. The Governments concerned will, nevertheless, 
invest their respective clearing offices with all necessary 
powers for the recovery of debts which have been ad- 
mitted. 

As an exception, the admitted debts of persons having Does not apply 
suffered injury from acts of war shall only be credited to 
the Creditor Clearing Office when the compensation due 
to the person concerned in respect of such injury shall 
have been paid. 

15. Each Government will defray the expenses of the 
Clearing Office set up in its territory, including the sala- 
ries of the staff and the various expenses. 

16. Where the two clearing offices are unable to agree 
whether a debt claimed is due, or in case of a difference 
between an enemy debtor and an enemy creditor, or be- 
tween the clearing offices, the dispute shall either be 
referred to arbitration if the parties so agree under con- 
ditions fixed by agreement between them, or referred to 
the Mixed Arbitral Tribunal provided for in Article I. 

At the request of the Creditor Clearing Office the dis- 
pute may, however, be submitted to the jurisdiction of 
the Courts of the place of domicile of the debtor. 

17. Recovery of sums found by the Mixed Arbitral 
Tribunal, the Court, or the Arbitration Tribunal to be 
due shall be effected through the clearing offices as if 
these sums were debts admitted by the Debtor Clearing 
Office. 

18. Each of the Governments concerned shall appoint 
an agent who will be responsible for the presentation to 



KCONOMIC CLAUSES. 

the Mixed Arbitral Tribunal of the cases conducted on 
behalf of its clearing office. This agent will exercise a 
general control over the representatives or counsel em- 
ployed by its nationals for the conduct of their cases. 

Decisions will be arrived at on documentary evidence, 
but it will be open to the Tribunal to hear the parties in 
person, or according to their preference by their repre- 
sentatives a])proved by the two Governments, or by the 
agent referred to in the preceding paragraph, who shall 
be com])etent to intervene along with the party or to 
re-open and maintain a claim abanrloned by the same. 

19. The clearing offices concerned will lay before the 
Mixed Arbitral Tribunal all the information and docu- 
ments in their possession, so as to enable the Tribunal to 
decide rapidly on the cases which are brought before it. 

90. Where one of the parties concerned ap])eals against 
the joint decision of the two clearing offices he shall 
make a deposit against the costs, which deposit shall 
only be refunded when the first judgment is modified in 
favor of the appellant and in proportion to the success he 
may attain, his opjwnent in case ol' such a refund being 
required to pay an equivalent proportion of the costs and 
expenses. Security accej)ted by the Tribunal may be 
substituted for a deposit. 

A fee of 5 per cent, of the amount in dis]nite shall be 
charged in respect of all cases l)rought before the Tribunal. 
This fee shall, unless the Tribunal directs otherwise, be 
borne by the unsuccessful party. Such fee shall be added 
to the deposit referred to in the preceding i)aragraph. 
It is also independent of the security provided for by the 
same paragraph. 

The Tribunal may award to one of the parties a sum 
in respect of the expenses of the proceedings. 

Any sum payable under this paragraph shall be credited 
to the clearing office of the successful party as a separate 
item. 



31 



COMMENTS. 



ECONOMIC CLAITSES. 

21. With a view to the rapid settkMiient of ehiims, 
due regard shall be paid in the appointment of all persons 
connected with the clearing oflSces or with the Mixed 
Arbitral Tribunal to knowledge of the language of the 
other country concerned. Each of the clearing offices 
will be at liberty to correspond with the other, and to 
forward documents in its own language. 

22. Subject to any special agreement to the contrary 
between the Governments concerned, debts shall carry 
interest in accordance w^ith the following provisions : — 

Interest shall not be payable on sums of money due by 
way of dividend, interest, or other periodical payments 
which themselves represent interest on capital. 

The rate of interest shall be 5 ])or cent, per annum 
except in cases where, by contract, law, or custom, the 
creditor is entitled to payment of interest at a different 
rate. In such cases the rate to which he is entitled shall 
prevail. 

Interest shall run from the date of commencement of 
hostilities (or, if the sum of money to be recovered fell 
due during the war, from the date at which it fell due) 
until the sum is credited to the clearing office of the 
creditor. 

Sums due by way of interest shall be treated as debts 
admitted by the clearing offices and shall be credited to 
the Creditor Clearing Office in the same way as such 
debts. 

23. Where by decision of the clearing offices or the 
Mixed Arbitral Tribunal a claim is not recognized as an 
enemy debt, the creditor shall be at liberty to prosecute 
the claim before the Courts, or in any other way open to 
him. The presentation of a claim to the clearing office 
prevents the time of limitation of right of action from 
running. 

2-i. The High Contracting Parties agree to regard the 
decisions arrived at in accordance with the provisions of 
these regulations as final and conclusive, and to render 
them binding upon their nationals. 
32 



COMMENTS. 



ECONOMIC CLAUSES. COMMENTS. 

25. In any case where a Creditor Clearing Office de- 
clines to notify a claim to the Debtor Clearing Office, or 
to take any step provided for in these Regulations, in- 
tended to make effective in whole or in part a request 
of which it has received due notice, the enemy creditor 
shall be entitled to receive from the Clearing Office a 
certificate setting out the amount of the claim, and shall 
then be entitled to prosecute tlu^ claim before the courts 
or in any other way open to him. 



130358—19 5 



Part IV. 
rROPERTY, RIGHTS AND INTERESTS. 

SUMMARY OF MEMOUANDUM BY AMERICAN DEI.EGATES. COMMENTS. 

CONTENTS. 

Tlie principles for dealing with enemy property are as follows : 

1. Germany is required to restore to the owners all private property 
seized in Germany, not already sold. As regards all such property 
which has been sold, it must either restore the property or pay the 
proceeds of sales to the Government of the owner. Germany is also 
recpired to pay for any damages or injuries inflicted by its Govern- 
ment upon the private property of the nationals of Allied citizens in 
GermanjT. The amount of said damages or injuries is to be deter- 
mined by a mixed tribunal with a neutral president. 

The Allied countries are allowed to hold the property of German 
nationals in their countries, and at their option to sell such property 
and use the proceeds: (1) to pay for the property of their citizens not 
restored or paid for by Germany; or (2) to pay for damages to their 
property, in Germany; or (3) to pay debts of their nationals owed by 
nationals of Germany. In case, however, Germany keeps its obliga- 
tion to restore or pay for the Allied property in Germany, the Allied 
Countries would not have to use the proceeds of German property for 
such purposes. 

2. In addition, the Allied Countries are allowed, at their option, to 
use the German private property which is in their countries, to pay 
other claims against Germany, in accordance witli the other terms of 
the Treaty. 

3. Germany agrees to compensate its own nationals for any 
]n-operty of theirs retained or sold by the Allied States. 

The adoption of the above principles will leave the United States 
free to deal with German property in the United States as Congress 
may decide. It may 

(a) return all or any part of the property to the former owners: 

(b) sell all or any part of such property and use all or any part o{ 
the proceeds of aU sales to pay the claims of American citizens on 
account of their property and rights in Germany; 

(c) use the proceeds of such sales to pay any claims against Ger- 
many which may arise according to the other terms of the Treaty 
(e. g. on possible reparation or indemnity account). 

The Trading with the Enemy Act pro^^des that the ultimate dis- 
jrosition of the enemy property taken by the Alien Property Custo- 
dian shall be decided by Congress, after the \ ar. The above plan 
provides for Germany's consent to this enactment. The I'nited 
States agrees, however, to give due credit to Germany, for any 
property of its citizens (mcluding the proceeds of sales) which the 
United States may apply to the purposes specified above and to give 
due credit either to Germany or to its nationals for the remainder of 

34 



ECONOMIC CLAUSES. 



COMMENTS. 



For brevity, in 
the margin and 
memorandum, 

•AUied" will 
include 
"Associated." 



(a) Requires 
the restoration 
of Allied 
property in 
Germany, not 
already sold. 



(b) Authorizes 
the Allies to 
sell in future 
German property 
in their terri- 
tory, at their 
option. Doe; 
apply to past 
sales. 



not 



such ])n)perty or proceeds, not so aj)plied. This stipuhxtion expressly 
exclutles the idea that the United States will coniiscate any ])roperty. 
Meanwhile all acts under war legislation in all countries, including 
Germany, m dealing with enemy property, arc confirmed, so tliat 
the titles to property sold by the Alien Property Custodian in the 
United States, as well as the titles to that sold by the German Gov- 
ernment, are confirmed. This is intended to preclude, as far as 
possible, litigation to question such titles. The United States must, 
however, elect not to accept ^Vitide A and Regulation X of Part III 
(Pre-War Debts) as e,\p>lained in the comments on that part. 

Artk^le B. 

The question of private i)roperty, riglits and interests 
in enemy countries shall be settled according to the pro- 
visions of the annexed Regulations Y, which cany out 
and apply the following princii)les : 

{a.) The exceptional war measures and measures of 
transfer defined in paragraph 3 of Regulations Y taken by 
Germany with respect to the property, rights and interests 
of nationals of Allied and Associated States when the 
liquidation has not already been completed shall be 
immediately discontinued or stayed and the property, 
rights, and interests concerned restored to their owners, 
who shall enjoy full rights therein in accordance with the 
])rovisions of Article C. 

(/>.) Subject to any contrary stipulations which may be (b) probawy 
ju-ovided for in the present Treaty, the Allied and Asso- m1 make S 
ciated States reserve the right to retain and liquidat<> all "''"" '*^''' 
l)roi)erty, rights and interests of German nationals or 
companies controlled by them within their territories, 
colonies, possessions and protectorates such as restilt from 
the Treaty of Peace. The liquidation shall be carried out 
in accordance with the laws of the Allied or Associated 
State concerned, and the German owner shall not l)e able 
to dispose of such property, rights or interests nor subject 
them to any charge without the consent of that State. 

German nationals who automatically acquire the na- 
tionality of an Allied or Associated State in accordance 
with the provisions of the Treaty of Peace will not be con- 
sidered as German nationals within paragraph (b). 



iCONOMIC CLAUSES. 



COMMENTS. 



(c) The prices 
and valuations 
for future sales 
in Allied 
countries will be 
fixed by such 
countries. 



(d) All sales 
and action here- 
tofore taken in 
all states, in- 
cluding Germany, 
are coniirnied. 



(e) Claims of 
Allied citizens 
for injuries to 
their property 
in Germany to 
be settled by a 
new court with 
a neutral presi- 
dent. Such 
claims shall be 
assumed by 
Germany, and 
may be paid by 
Allied states out 
of German 
property in 
their hands. 



(f ) Requires 
the restoration 
of property 
sold, but, under 
(g), applies only 
to countries 



(c.) The price or the amount of compensation in respect 1^ 'future "a\^e'r 
of the exercise of the right referred to in the preceding ""^^y- 
paragrai)h (b) will be fixed in accordance with the prin- 
ciples of sale or valuation determined by the laws of the 
country in which the property shall have been retained 
or liquidated. 

{d.) As ))etween the Allied and Associated States or 
their nationals on the one hand, and Germany or her 
nationals on the other hand, all the exceptional war 
measures or measures of transfer or acts done or to be done 
in execution of such measures as defined in Regulations Y, 
paragraphs 1 and 3, shall be considered as final and bind- 
ing as to all persons except as regards the reservations 
provided in the present Treaty or its annexes. 

[Additional sentence proposed April 23 by American Delegation: "But this 
paragraph and the said Regulations Y shall not affect the rights of Allied and Asso- 
ciated States, or their nationals as between one another."] 

[e.) The claims made by the nationals of Allied or Asso- 
ciated States in respect of damage or injury inflicted upon 
their property, rights or interests, or on any company or 
association in which they are interested in German terri- 
tory by the application either of exceptional war measures 
or of measures of transfer mentioned in Regulations Y, 
paragraphs 1 and 3, shall be investigated, and the total of 
the compensation due to the claimant shall be determined 
by the mixed Arbitral Tribunal provided for in Article I 
or by an Arbitrator appointed by that Tribunal. This 
compensation will be borne by Germany, and may be 
charged upon the property of German nationals within 
the territory or under the control of the claimant's State. 
This property may be constituted as a pledge for enemy 
liabilities under the conditions fixed by Regulations Y, 
paragraph 4. The payment of this compensation may 
be made by the Allied or Associated State, and the 
amount will be debited to Germany. 

(/.) AVhenever an Allied or Associated owner of i)roi)- W r>oes not 
erty which has been subjected to a measure of transfer in 
German territory expresses a desire for its restitution, his 



36 



SUMMARY OF 
CONTENTS. 



KCOXOMIC CLAUSES. 

claim for compensation in accordance with paragraph {e) 
shall be satisfied b}- the restitution of the said ])roperty if 
it still exists in specie. 

In such case Germany shall take all necessary steps to 
restore the evicted owner to the possession of his property, 
free from all encumbrances or burdens with which it may 
have been charged after the liquidation, and to indemnify 
all third parties injured by the restitution. 

If the restitution provided for in the first paragTaph can- 
not be effected, private agreements arranged by the inter- 
mediation of the States concerned oi the offices provided 
for in Regulations X may be made, in order to secure that 
the Allied or Associated national be compensated for the 
injui-y referred to in paragraph (e) by the grant of advan- 
tages or equivalents which he agrees to accept in place of 
the property, rights or interests from which he was evicted. 

Through restitution in accordance with this article the 
price or the amount of compensation fixed by the applica- 
tion of paragraph (e) Avill be reduced by the actual value of 
the property restored, account being taken of compensa- 
ti n in respect of use or deterioration. 

((J.) The rights conferred ))}■ paragraph (/) are reserved 
to owners who are nationals of Allied or Associated States 
within whose territoiy legislative measures prescribing the 
general liquidation of enemy property, rights or interests 
were not applied before the signature of the armistice. 

(//.) Except in cases where, by an application of para- 
gra[)h (/), restitutions in s])ecie have been made, the net 
proceeds of sales of enemy proj)erty carried out either 
l)y virtue of exceptional Avar legislation, or by application 
of the present Treaty or its annexes, and in general all 
cash assets of enemies, shall be dealt with as follows: — 



COMMENTS. 



(h) Requires 

that proceeds of 

sales of enemy 

property in 

Allied states 

shall be credited 

to Germany. 

Such proceeds 

may be used to 

pay claims of 

allied nationals. 

or claims 

against Germany under reparation clauses. 

(ii Requires /J \ \>, regards countries adopting Article A and Reau- '^^^ u. s. does 

Germany to pay V / <-■ 1 )!-. ,-~" „ot accept Art. 

rt °^°/^*'°°^i^ lations X. the said proceeds and cash assets shall be t ^*^ ^ "^ 

for their prop- i Part iii (printed 

erty if taken credited through the clearing office established by the =»bove, and 



by Allied states. 



said Article and Regulations 
owner is a national. 



therefore (hi ii 

to the State of which the r^" ^^F'^ '^"'^ 



enemy property in TJ. S. 



leaves the use of 
future action by Congress. 



ECONOMIC CLAUSES. 



COMMENTS. 



(ii.) As regards countries not adopting- Article A and sfaL^^red 

reservation in 
regard to the 



Regulation X, the proceeds of the property, and the cash 
assets, of the nationals of Allied and Associated States 
held by Germany shall be paid immediately to the person 
entitled thereto or to his Government ; the proceeds of the 
property, and the cash assets, of German nationals re- 
ceived by an Allied or Associated State may be used by 
the said State, in accordance with its laws, in payment 
of the claims and debts of its nationals specified in Regu- 
lations Y, paragraph 4, or in payment of claims against 
Germany in accordance with the other terms of this 
Treaty. Credit shall be given to Germany for the pro- 
ceeds and cash assets so used, and the remainder, if any, 
shall be credited to Germany or its nationals. 

(i.) Compensation which may be due to German na- 
tionals in respect of the sale or retention of their property, 
rights or interests in Allied or Associated States \\ ill be 
paid by Germany.* 

Article C. 

Germany undertakes, with regard to the property, 
rights and interests restored to nationals of Allied and 
Associated countries in accordance with the provisions of 
Article B, paragrajA (a) or (/). 

(a.) To restore and maintain, except as expressly pro- 
vided in the present Treaty, the property, rights and in- 
terests of the nationals of Allied or Associated States in 
the legal position obtaining in respect of the property, 
rights and interests of German nationals under the laws 
in force before the war. 

{b.) Not to subject the property, rights or interests of the 
nationals of the Allied or Associated States to any measure 
in derogation of property rights which is not applied 
equally to the property, rights and interests of its own 

*[ReviBed wording proposed by American Delegation April 2.3: "Germany under- 
takes to compensate its nationals in respect of the sale or retention of their property, 
rights or interests in Allied or Associated States.'"] 

38 



words 
cordance with 
the other terms 
of this treaty," 
and recommended 
that the words be, 
"specified in this 
treaty." A mem- 
orandum will be 
sent to the State 
Department in ex- 
planation of this 
recommendation. 



STTMMARy OF 
CONTENTS. 



1. Merely am- 
plifies Art. B 
(di; applies to 
all countries 
alike, including 
Germany. 



ECONOMIC CLAUSES. 



COMMENTS. 



nationals, and to pay adequate compensation in the event 
of the application of such measure. * * 

Beyulalions Y. 



1. In accordance with the provisions of Article B, para- 
graph {d), 



1. Most impor- 
tant, as it vali- 

the validity of vesting orders and of orders for ^ates action of 

'' _ ° Alien Property 

the winding up of businesses or companies, and of any custodwn, so 

other orders, directions or authorities of any court or anv p™perty in 

' -' « u. s. is con- 

department of the Government of any of the High Con- c«"ed. 

tracting Parties made or given, or purporting to be made 
or given, in pursuance of war legislation with regard to 
enemy property, rights and interests is confimied. The 
interests of all persons shall be regarded as having been 
effectively dealt with by any order, direction, decision or 
instruction dealing with ])roperty in which they may be 
interested, whether such interests are specifically men- 
tioned in the order, direction, decision, or instruction or 
not. Xo question shall be raised as to the regularity of a 
transfer of any property or rights dealt with in pursuance 
of any such order, direction, decision or instruction. 

Eveiy action taken with regard to any property, busi- 
ness, or company, whether as regards its investigation, 
sequestration, compulsory administration, use, requisition, 
supei-vision, or \\'inding-up, the sale or management of 
property rights or interests, the collection or discharge of 
debts, the payment of costs, charges or expenses, or any 
other matter whatsoever, in pursuance of orders, direc- 
tions, decisions, or authorities of any court or of any de- 
partment of the Govermnent of any of the High Con- 
tracting Parties, made or given, or purporting to be made 
or given, in pursuance of war legislation with regard to 
enemy property or interests, is confirmed. 

**The followins; |)aragraph of this article, whicli was originally proposed by the 
French Delegation, was supported by the Italian, Polish, Portuguese, Roumanian 
and Serbian Delegations, and opposed by the United States, British, Japanese, Bel- 
gian and Chinese Delegations: 

"Not to apply to the said property, rights or interests any charge, tax or contri- 
bution, the effect of wliich would be to make them assist in the payment of the indem- 
nities due bv Germany on account of the war." 



39 



SUMMARY OF 
CONTENTS. 



2. Prevents 
claims being 
brought by 
Germany or its 
nationals on 
account of war 
measures. 



3. Merely de- 
fines the terms 
used. 



ECONOMIC CLAUSES. 

Provided that the provisions of this paragraph shall not 
be held to prejudice the titles to property heretofore ac- 
quired in good faith and for value and in accordance with 
the laws of the country in which the property is situated 
by nationals of the Allied and Associated Countries.* 

The provisions of this paragraph do not apply to such 
of the above-mentioned measures as have been taken by 
the German authorities in invaded or occupied territory. 

2. No claim or action shall be made or ])roug-ht against 
any Allied or Associated State or against any person acting 
on behalf of or under the direction of any legal authority 
or Department of the Government of such a State by Ger- 
many or by any German national wherever resident in 
respect of any act or omission with regard to his jn-operty, 
rights or interests during the war or in preparation for the 
war. Similarly no claim or action shall be made or brought 
against any person in respect of any act or omission under 
or in accordance with the exceptional war measures, 
laws or regulations of any Allied or Associated State. 

3. In Article B the expression "exceptional war 
measures" includes measures of all kinds, legislative, 
administrative, judicial, or otherwise that have been taken 
or will be taken hereafter with regard to enemy property, 
and which have had or will have the effect of removing 
from the proprietors the power of disposition over their 
property, though without affecting the ownership, such as 
measures of supervision, of compulsory administration, 
and of sequestration ; or measures having as an object the 
seizure of, the use of, or the interference with enemy assets, 
for whatsoever motive, under whatsoevei form or in what- 
soever place. Acts in the execution of these measures 
include all detentions, instructions, orders or decrees of 
Government departments or courts applying these meas- 
ures to enemy property, as well as acts executed by any 
person connected with the administration or the super- 

*[Additional paragraph proposed by American Delegation April 23 : 

"No rights of any Allied or Associated Power or its nationals which existed prior 

to the entry of such Power into the war shall be prejudiced by the provisions of 

Article B or Regulations Y."] 

40 



COMMENTS. 



This proviso is 
intended to pre- 
serve rights of 
our citizens who 
bought property 
of Germans in 
good faith be- 
fore we entered 
the war. 



2. Intended to 
prevent claims 
on account of 
operation of 
our war legisla- 
tion, e. g. black 
list of War 
Trade Board. 



SUMMARY OF 
CONTENTS. 



ECONOMIC CLAUSES. 



COMMENTS. 



4. Allows allies, 
at their option, 
to use property 
of German 
nationals in 
their countries 
to secure or pay 
claims of their 
own nationals 
against Germans 



5. Provides pro- 
tection for an 
Allied Corpora- 
tion from un- 
fair use of its 
devices in a 
neutral country, 
through seizure 
of the subsidiary 
of such Allied Cor- 
poration in Ger- 
many. 



vision of enoniy property, such as the payment of debts, 
the collecting of credits, the ])ayment of any costs, charges, 
or expenses, collecting of fees, etc. 

Measures of transfer are those which have affected or 
will affect the ownership of enemy ])roperty by trans- 
ferring it in whole or in part to a pereon other than the 
enemy owner, and without his consent, such as measures 
directing the sale, liquidation, or devolution of ownership 
in enemy ])roperty, the cancelling of titles or seciu'ities, etc. 

4. .Vll property, estates, goods and interests of German 
nationals within the territor}' of any Allied or Associated 
State and the net proceeds of their sale, liquidation or 
other dealing therewith may be charged by that Allied 
or Associated State in the first place with pa^inent of 
amounts due in respect of claims l)y the nationals of that 
Allied or Associated State, with i-egard to their property, 
estates, goods, and interests in German territory, or del)ts 
owing to them by Gennan nationals. They may be 
charged in the second place with pa>Tnent of the amounts 
duo in respect of claims by the nationals of such Allied or 
Associated State with regard to their property, estates, 
goods and interests in other enemy States, or debts owing 
to them by nationals of such States in so far as those claims 
are otherwise unsatisfied. 

.■). Notwithstanding the ])rovisions of Article B Avhere 
inmiediately before the outbreak of Avar a com])any in- 
corporated in an Allied or Associated State had rights in 
common with a comparty controlled by it and incorporated 
in Gennany to the use of trade marks in third countries, 
or enjoyed the use in common with such company of unique 
means of reproduction of goods or articles for sale in third 
countries, the former company shall alone have the right 
to use these trade-marks in third countries to the exclusion 
of the Genuan company, and these unique means of repro- 
duction shall be handed over to the former company, not- 
withstanding any action taken under German war legis- 
lation Avith regard to the latter company or its business, 
industri-al property or shares. Nevin-theless, the former 

130358—19 6 41 



4. U. S. objects 
to last sentence 
which, although 
merely permis- 
sive, allows 
allied state to 
charge property 
of German 
nationals with 
claims of allied 
nationals against 
nationals of 
other enemy 
states, e.g. 
Austria or 
Turkey. 



5. Very special 
case. V. S. 
probably not 
concerned. 



SUMMARY OF 
CONTENTS. 



10. Extremely 
important 
clause, as we 
cannot adjust 
serious compli- 
cations regard- 
ing German 
properties in 
U. S. without 
information 
sent from 
Germany. 



ECONOMIC CLAUSES. 

company, if requested, shall deliver to the latter company 
derivative copies permitting the continuation of repro- 
duction of articles for use within German territory. 

6. As provided in the present Treaty, the German 
Government is responsible for the conservation of prop- 
erty, rights and interests of the nationals of the Allied 
or Associated States that have been subjected to excep- 
tional war measures, up to the time when restitution is 
carried out in accordance with Article B. 

7. Within one year from the date of the Treaty coming 
into force the Allied or Associated States will specify the 
property, rights and interests over which they intend to 
exercise the right provided in Article B paragraph (/). 

8. The restitution provided in Article B will be cur- 
ried out by order of the German Government or of the 
authorities who have taken its place. 

Detailed accounts of the action of administrators shall 
be furnished to the interested persons by the German 
authorities upon request, which may be sent in at any time 
after the signature of the present Treaty. 

9. Until completion of the liquidation provided for by 
Article B, (paragraph {h), the property, rights and inter- 
e'sts of Gemian nationals will continue to be subject to 
exceptional war measures that have been or will be taken 
with regard to them. 

10. Gemiany will, within six months from the coming 
into operation of the presei\t Treaty, deliver to each 
Allied or Associated State all -securities, certificates, 
deeds, or other documents of title held by its nationals 
and relating to property, rights or interests situated in 
that Allied or Associated State, including any shares, 
stock,* debentures^debenture stock, or other obligations 
of any company incorporated in accord^nce^dtlTth^ Ijtws 
of such State. Germany will at any time on demand of 
any Allied or Associated State furnish such infomiation 
as may be required with regard to the property, rights and 
interests of German nationals within the territory of 
such Allied or Associated State, or "with regard to any 

42 



COMMENTS. 



9. Of little 
effect in TJ. S. 
without addi- 
tional Act of 
Congress. 



ECONOMIC CLAUSES. 



COMMENTS 



12. Applies to 
all countries 
and requires 
funds invested 
to be accounted 
for irrespective 
of investment. 



13. Detail re- 
garding return 
of Allied prop- 
erty by Ger- 
many. 



14. Makes clear 
that debts, and 
accounts are in- 
cluded as prop- 
erty. 



tran^jactioiis concerning such property, rights or interests 
effected since 1st July, 1914. 

11. The expression "cash assets" inckides all deposits 
or funds established l;eforc or after the declaration of war, 
as well as all assets coming from de])osits, revenues, or 
])rofits collected by administrators, sequestrators, or others 
from funds ])laced on deposit, etc. 

12. All investments effected ■\\'ith the cash assets of 
enemies, vvhether in the territory of the Btate responsible 
for the administration or in Allied territory Avhich (Jer- 
many occupied, by persons responsible for the administra- 
tion of enemy properties or having control over the admin- 
istration, or by order of such pereons or of any authority 
whatsoever, shall be annulled. These cash assets shall 
be accounted for irrespective of any such investment. 

IP). Within one month from the coming into operation 
of the present Treaty, and on demand at any tune, Ger- 
many will deliver to the Allied and Associated States all 
accounts, vouchers, records, docmiients, and infomiation 
of any kind which may be within German territory, and 
which concern the property, rights and interests of the 
nationals of those States that have been subjected to an 
exce])tional war measure, or to a measure of transfer 
either in Gennan territory or in the Allied territoiy 
which Gennany has occupied. 

The controllers, supervisors, managers, administrators, 
sequestrators, liquidators, and receivers shall be person- 
ally responsible under guarantee of the Gennan Govern- 
ment for the innnediate deliveiy in whole of these ac- 
counts and documents, and for their accuracy. 

14. The provisions of Article B and Regulations Y 
relating to property, rights and interests in enemy coun- 
tries, and the proceeds of the liquidation thereof, ai)ply 
to debts, credits and accounts. Article A and Regulations 
X regulating only the method of pajancnt.* 

*[.\dditionaI .sentence proposed by -Imeriean Delegation April 23: "The property, 
rights and interests of nationals of the Allied and Associated Powers include any 
sub.stantial interest of such nationals in companies or associations organized under 
German law".] 

43 



14. InU. S., 
Alien Property 
Custodian has 
already adopted 
this method. 



ECONOMIC CLAUSES. 



COMMENTS. 



change very 

between (iermany and the Allied or xVssociated States, ^'^l^^^- 



Referred to 



sion and not 

Dominions or India, in respect of which a declaration ^a^^y decided 
shall not have been made that they adopt Article A and 
Regulations X, and between their respective nationals, 
the provisions of Article A respecting currency in which 
payment is to bo made and the rate of exchange shall 
apply. 

15. Questions concerning industrial, literary, or artistic a provisional 
property are regulated by other provisions of the present wm be eiimi- 

rn i^i" 1 11 -iiiii "^'^'l °° fl"='l 

ireaty, except so far as they nave been or will be dealt drafting and 
with in the liquidation of property, rights, interests, other treaty 
companies or businesses under war legislation, or in ac- 
cordance wdth the stipulations of the present Treaty, 



44 



Tart V. 

CONTRACTS, PRESCRIPTIONS, JUDGMENTS, 
MIXED ARBITRAL TRIBUNAL. 

MEMOEANDUJI BY AMERICAN DELKGATES. 

Prewar contracts. — Most of the other countries have msistetl upon 
a general plan bj- which contracts existing before the war, between 
their nationals and nationals of Germany shall be generally cancelled. 
There are some exceptions like pecimiary liabihties; and some 
special kinds of contracts like insurance are otherwise treated. The 
United States, Brazil, and Japan, however, have not adhered to this 
plan, and are expressly excepted from its (iperation. 

In the United States many contracts were dissolved, under om- 
laws, by the state of war. Examples are: partnerships: contracts 
requiring communication with the enemy; and, under decisions of 
oiu- courts, contracts the performance of which was rendered unjust 
or inequitable on account of the changed conditions produced by 
the state of war. Other contracts were merely suspended. These 
last would be revived automatically under our laws, at the end of 
the war, and, so far as the United States is concenicd, are treated as 
revived in this draft. 

The dissolution of all contracts which are now merely suspended, 
would entail g^-eat confusion and hardship upon many persons and 
businesses, including both those of the United States and of Germany; 
it would not seem just to cancel such contracts without the consent 
of the owners. 

The other countries represented on the Economic Commission have 
appreciated the position of the United States in this respect and have 
consented that tJiis coimtry, as well as Brazil and Japan should leave 
unchanged the legal status of contracts to wliich their nationals are 



Provision is made, however, in Article I., whereby nationals of all 
the Allied and Associated Countries, the United States included, 
•shall have access to a new tribunal with a neutral president, so that 
they need not be compelled to resort to German courts f(u- the adjudi- 
cation of their contractual rights after the war. 

Article D. 



COMMENTS. 



General dissolu- 
tion of all pre- 
war contracts, 
with certain 
exceptions. 



(a.) Any contract concluded between enemies shall be Art. d does 
regarded as having- been dissolved as from the time when u^'s'^^see" 
any two of the parties became enemies, except in respect ^^''^^"^'^ ^"^ 
of any debt or other pecuniary obligation arising out of 
45 



SUMMARY OF ECONOMIC CLAUSES. COMMENTS. 

CONTENTS. 

any act done or money paid thereunder, and sul)ject to 
the exceptions and special rules with regard to particular 
contracts or classes of contracts contained hereinafter or 
in Regulations Z annexed hereto. 

(b.) Any contract of which the execution shall be re- 
quired in the general interest within six months from the 
date of coming into force of the present Treaty by the 
Allied or Associated Government of which one of the 
parties is a national shall be excepted from dissolution 
under this article. 

The Mixed Arbitral Tribunal provided for by Article I 
shall be empowered, when the execution of the contract 
thus kept alive would, owing to the alteration of trade 
conditions, cause one of the parties considerable prejudice, 
to grant to the prejudiced party equitable compensation. 

(a.) Having regard to the provisions of the constitution 
and law of the United States of America, of Brazil, and of 
Japan, neither the present article nor Article E, nor 
Regulations Z shall apply to contracts made between 
nationals of these States, and German nationals, nor shall 
Article J apply to the United States of America or her 
nationals. 

(d.) The present Article and Regulations Z shall not 
apply to contracts to which inhabitants of territories of 
which the sovereignty has been transferred are parties, 
if such parties shall acquire under the present Treaty the 
nationality of an Allied or Associated country. Nor shall 
they apply to contracts between nationals of the Allied 
and Associated States between whom trading has been 
prohibited by reason of one of the parties being in Allied " 
or Associated territory in the occupation of the enemy. 

(e.) Nothing in the present Article or Regulations Z 
shall be deemed to invalidate a transaction lawfully 
carried out in accordance with a contract between enemies 
if it has been carried out with the authority of one of the 
belligerent States. 



46 



SUMMARY OF 
CONTENTS. 



Details with 
respect to 
Art. D. 



ECONOMIC CLAUSES. 

Article E. 

(a.) All periods of prescription or limitation of right 
of action, whether they began to run before or after the 
outbreak of war, shall be treated in the territory of the 
High Contracting Parties, so far as regards relations 
between enemies, as having been suspended for the dura- 
tion of the war. They shall begin to run again at the 
earliest, three months after the coming into ooperation 
of the present Treaty. This proAision shall ap])l>' to the 
period prescribed for the presentation of interest or divi- 
dend couj)ons or for the presentation for repanuent of 
securities dra^vn for repayment or repayable on any 
other ground. 

(b.) Where, on account of the failure to perform any 
act or comply with any fonnality during the war, measures 
of execution have been taken in Genuan territory to the 
prejudice of a national of an Allied or Associated State, 
the claim of such national shall, if the matter does not 
fall within the competence of the Courts of an Allied or 
Associated State, be heard b\ the :ylixed Arbitral Tribunal 
provided for bv Article I. 

(f.) The .Mixed Arl)itral Tribunal shall, upon the 
ai)plication of the Allied or Associated party interested, 
order the restoration, wherever having regard to the i)ar- 
ticular circumstances of the case this is equitable and pos- 
sible, of the rights which have been prejudiced by the 
measure of execution referred to in paragraph (/>). 

In the contrary case, the Mixed Arbitral Tribunal may 
grant compensation to the prejudiced party at the charge 
of the German (irovernment. 

(d.) \\'here a contract has been dissolved l)y reason 
either of failure on the part of either party to carry out its 
provisions or of the exercise of a right stipulated in the 
contract itself, the party prejudiced may apply to the 
Mixed Arbitral Tribunal for relief. The Tribunal Avill 
have the powers provided for in jmragraph (c) . 



COMMENTS. 



Art. B doe: 
apply to TJ. 



47 



SUMMARY OF 
CONTENTS. 



ECONOMIC CLAUSES. 



COMMENTS. 



Negotiable 
instruments 
not rendered 
invalid for 
failure to pre- 
sent them 
during the Wi 



(<■.) Tlio provisions of the preceding paragraphs shall 
apply to the nationals of the Allied and Associated States 
who have been prejudiced by reason of measures referred 
to above taken by the enemy in invaded or occupied terri- 
tory, if they have not been otherwise compensated. 

(/.) The German Government shall compensate any 
third party who may be prejudiced by any measures of 
restitution or restoration ordered by the Mixed Arbitral 
Tribunal under the provisions of the preceding paragraphs. 

{(/.) As regards negotiable instruments, the period of 
three months provided under paragraph (a) shall com 
mence as from the date on which any exceptional regula 
tions applied in the contracting countries with regard 
to negotiable instruments shall have definitely ceased to 
have force. 

Article F. 

As l)etween enemies no negotiable instrument made Applies to u. s. 
before the war shall be deemed to have become invalid 
l)y reason only of failure within the stipulated time to 
present the instrument for acceptance or payment or to 
give notice of non-acceptance or non-payment to drawers 
or indorsers or to protest the instrument, nor by reason of 
failure to complete any formality during the war. 

Where the period within which a negotiable instru- 
ment should have been presented for acceptance or for 
payment, or within which notice of non-acceptance or 
non-payment should have been given to the drawer or 
indorser, or within which the instrument should have 
been protested, has elapsed during the war, and the party 
who should have presented or protested the instru- 
ment or have given notice of non-acceptance or non- 
payment has failed to do so during the war, a period of 
not less than three months shall be allowed after ratifica- 
tion of the present Treaty within which presentation, 
notice of non-acceptance or non-payment or protest may 
be made. 



48 



ECONOMIC CLAUSES. 



COMMENTS. 



Abrogates 
judgments in 
German courts 
when allied 
defendant was 
not able to de- 
fend his rights. 



Article G. 

If a judgment has been given during the war in res})ect Applies to u. s. 
of any dispute which may have arisen, l)y the Gemian 
("ourts against a national of an Allied or Associated State 
in a case in which he was not able to make his defence, the 
Allied and Associated national who has suffered prejudice 
there])y shall be entitled to recover compensation, to be 
fixed by the Mixed Arbitral Tribunal provided for in 
Article I. 

At the instance of the national of the Allied or Asso- 
ciated State the compensation above-mentioned may, 
upon order to that effect of the ]\rixed Arl)itral Tril)unal, 
l)e effected where it is possible by replacing the parties in 
the situation which they occupied Ijefore the judgment 
w^as given l)y the Gennan C-ourt. 

The above compensation may likewise be obtained 
before the same Tribunal by the nationals of Allied or 
Associated States who have suffered prejudice by judicial 
measures taken in invaded or occupied territories, if they 
have not been otherwise compensated. 



Details regard- 
ing contracts 
annulled by 
this treaty. 



Does not apply 
to V. S. 



Regulations Z. 

1. — (Joncral P(ira(ini})lis. 

1 . Within the meaning of Articles I), E and F the par- 
ties to a contract shall be regarded as enemies when 
trading between them shall have been prohibited by the 
laws, orders or regulations of a State to whose jurisdiction 
one of those parties is subject. They shall be deemed to 
have become enemies from the date when such trading 
was prohil)ited. 

2. The following classes of contracts are excepted from r>oes not apply 
dissolution by Article D and, without prejudice to the 

right of liquidation contained in Article B, (b) of Part IV, 
remain in force subject to the a])plication of domestic 
laws, orders and regulations made during the war by the 



49 



ECONOMIC CLAUSES. COMMENTS. 

Allied and Associated States, and subject to the terms of 
the contracts: — 

(a.) Agreements having for their object the transfer 

of estates or of real or personal property where the 

property therein had passed or the object had been 

delivered before the parties had become enemies ; 

(b.) Leases and agreements for leases of land and 



(c.) Contracts of mortgage, pledge, or lien; 

{d.) Concessions of mines or quarries or deposits; 

(e.) Contracts between individuals or companies and 
States, provinces, municipalities, or other similar jurid- 
ical persons charged with administrative functions and 
concessions granted by States, provinces, municipal- 
ities or other similar juridical persons charged with 
administrative fimctions. 
3. If the provisions of a contract are in ])art dissolved Does not appiy 

. . . . . to U. S. 

under Article D, the remaining provisions of that con- 
tract shall continue in force if the provisions of such 
contract are severable, but where the provisions are not 
severable the contract shall be deemed to have been 
dissolved in its entirety. 

II. — Paraf/rapJis relating to certain Clauses of Contracts. 
Stock ExcJtange and Conimercial Exchange Con- 
tracts. 



4. — {a.) Rules made during the war by any recognized 
Exchange or Conmiercial Association providing for the 
closure of contracts entered into before the war by an 
enemy are confirmed by the High Contracting Parties, 
as also any action taken thereunder, provided — 

(i.) That the contract was expressed to be made 
subject to the rules of the Exchange or Association in 
question ; 

(ii.) That the rules in question applied to all persons 
concerned ; 

(iii.) That the conditions attaching to the closure 
were fair and reasonable. 

50 



Does not apply 
to U. S, 



ECONOMIC CLAUSES. COMMENTS. 

(h.) The preceding paragraph shall not apply to the 
rules made during the occupation by Exchanges or Com- 
mercial Associations in the districts occupied by the 
enemy. 

(c.) The closure of contracts relating to cotton "fu- 
tures, ' ' which were closed as on 31st July, 1914, under the 
decision of the Liverpool Cotton Association, is also 
confirmed. 
Secwity. 

5. The sale of a security for a debt owing by an enemy Does not apply 
shall be deemed to have been valid if the debt was unpaid 
irrespective of notice to the owner if the creditor acted 

in good faith and with reasonable care and prudence, and 
no claim by the debtor on the ground of such sale shall be 
admitted. 

This stipulation shall not apply to any sale of securities 
effected by an enemy during the occupation in regions 
occupied by the enemy. 
Negotiable Instruments. 

6. So far as regards countries which adopt Regulations Does not apply 
X the pecuniary obligations existing between enemies 

and resulting from the issue of negotiable instruments 
shall be adjusted in confonnity with the said Regulations 
by the instrumentality of the Clearing Offices, which 
shall assume .the rights of the holder as regards the various 
remedies open to him. 

7. If a person has either before or during the 
assumed liability upon a negotiable instriunent in accord- 
ance with an undertaking given to him by a pei*son who 
has subsequently become an enemy, the latter shall 
remain liable to indemnify the former in respect of his 
liability notwithstanding the outbreak of war. 



51 



ECONOMIC CLAUSES. COMMENTS. 

III. — Contracts of Insurance. 

8. Contracts of insurance entered into by any person Does not apply 
with another person who subsequently became an enemy 

will be dealt with in accordance with the following 
paragraphs : — 
Fire Insuraiuf'. 

9. Contracts for the insurance of property against fire Does not apply 

, . 1 . , toU. s. 

entered into by a person interested m such property with 

another person who subsequently became an enemy shall 

not be deemed to have been dissolved by the outbreak of 

war. or by the person becoming an enemy, or on account 

of the failure during the war and for a period of three 

months thereafter to perform his obligations under the 

contract, but they shall be dissolved from the time of the 

annual ])remium becoming due three months after the 

coming into operation of the present Treaty. 

A settlement of unpaid premiums Avhich became due 

during the war, or of claims for losses which occurred 

during the war shall be effected. 

10. Where by administrative or legislative action an Does not apply 
insurance against fire effected before the war has been 
transferred during the war from the original to another 
insurer, the transfer will be recognised and the liability 

of the original insurer will be deemed to have ceased as 
from the date of the transfer. The original insurer will, 
however, be entitled to receive on demand full infonnation 
as to the terms of the transfer, and if it should appear 
that these terms were not equitable they shall be amended 
so far as may be necessary to render them equitable. 

Furthermore, the insured shall, subject to the con- 
currence of the original insurer, be entitled to retransfer 
the contract to the original insurer as from the date of the 
demand. 



52 



ECONOMIC CLAUSES. COMMENTS. 

Life Insurance. 

11. Contracts of life insurance entered into between Does not apply 

to TJ. S. 

an insurer and a person who subsequently became an 
enemy shall not be deemed to have been dissolved by the 
outbreak of war, or by the person becoming an enemy. 

Any sum which during the war became due upon a 
contract deemed not to have been dissolved u'nder the 
preceding paragraph shall be recoverable after the war 
with the addition of interest at 5 per cent, per annum 
from the date of its becoming due up to the day of pay- 
ment. 

AMiere the contract has lapsed during the war owing to 
nonpayment of premiums, or has become void from breach 
of the conditions of the contract, the assured or his repre- 
sentatives or the persons entitled shall have the right at 
any time within twelve months of the coming into force 
of the present Treaty to claim from the insurer the sur- 
render value of the policy at the date of its lapse or 
avoidance. 

Where the contract has lapsed during the war owing 
to nonpayment of premiums the payment of which has 
been prevented by the enforcement of measures of war, 
the policy-holder or his representatives or the persons 
entitled shall have the right to restore the contract on 
payment of the premiums with interest at five per cent, 
per annum within three months from the coming into 
operation of the present Treaty. 

12. Any Allied and Associated Power may within Does not apply 

to TJ. S. 

three months of the coming into operation of the present 
Treaty cancel all the contracts of insurance running be- 
tween a German insurance company and its national 
under conditions which shall protect its nationals from 
any prejudice. 



53 



SUMMARY OF 
CONTENTS. 



ECONOMIC CLAUSRS. 



COMMENTS. 



Te.vt Previously Adopted 
by the Coinnmsioii as a 
Compromise : 
To this end the German 
insurance company will 
hand over to the Allied or 
Associated Government 
concerned the proportion 
of its assets attributable to 
the policies so cancelled and 
will be relieved from all 
liability in respect of such 
policies. The assets to be 
handed over shall be deter- 
mined by an actuary ap- 
pointed by the Mixed Ar- 
bitral Tribunal. 



Neio Text Proposed by the 
Belgian Delegation: 
To this end, if the con- 
tracts are continued by na- 
tional or Allied companies, 
the previous insurer shall be 
bound to pay the amount of 
the mathematical reserve to 
the Government of the new 
insurer. The said Govern- 
ment shall be responsible 
for transferring th-e amount 
to the new insurers. The 
mathematical reserve shall 
be calculated in accordance 
with the decree of the 20th 
January, 1906, for the ap- 
plication of the French law 
of the 17th March, 1905, 
relative to the supervision 
and control of life assurance 
companies. 

The payment may be ex- 
tended over a period of ten 
years at the most, interest 
being calculated at a rate 
of one-half per cent above 
that on which the mathe- 
matical reserves were cal- 
culited.* 

*This text was referred by the Commis- 
sion to a Sub-Commission which was un- 
able to come to an agreement, the Belgian, 
French, and Roumanian Delegations sup- 
porting it, and the United States and 
British Delegations stating they could 
not accept it. 



54 



ECOJ^OMIC CLAUSES. COMMENTS. 

13. Whoro contracts of life insurance have been en- ^"^^ s"' ^''^^^ 
tered into by a local ])rancli of an insurance company 
established in a country which subsequently l:)ecame an 

enemy country, the contract shall, in the absence of any 
stipulation to the contrary in the contract itself, be gov- 
erned by the local law, but the insurer shall be entitled 
to demand from the insured or his representatives the 
refund of sums paid on claims made or enforced under 
measures taken dming the war, if the making or enforce- 
ment of such claims was not in accordance with the terms 
of the contract itself nor consistent with the laws or 
treaties existing at the time when it was entered into. 

14. In any case where by the law applicable to the Does not apply 
contract the insurer remains bound l)y the contract not- 
withstanding the non-payment of premiums until notice 

is given to the insured of the termination of the con- 
tract, he shall be entitled where the giving of such 
notice was prevented by the war to recover the unpaid 
premiums with interest at five per cent, per annum from 
the insured. 

15. Insurance contracts shall be considered as con- Does not apply 
tracts of life assurance for the purpose of paragraphs 11 

to 14 when they depend on the probabilities of human 
life combined with the rate of interest for the calculation 
of the reciprocal engagements between the two parties. 
Marine Insurance. 

16. Contracts of marine insurance, including time Does not apply 
policies and voyage policies entered into between an ° ' ' 
insurer and a person who subsequently became an enemy, 

shall be deemed to have been dissolved on his becoming 
an enemy, except in cases where the risk undertaken in 
the contract had attached before he became an enemy. 

Where the risk had not attached, money paid by way 
of premium or otherwise shall Ije recoverable from the 
insurer. 

Where the risk had attached, effect shall be given to 
the contract notwithstanding the party becoming an 
enemy, and sums due under the contract either by way of 

55 



ECONOMIC CLA*LTSE.S. COMMENTS. 

])nMuiuiiis or in respect of losses shall be recoverable after 
the war. 

In the event of any agreement being come to for the 
pa3anent of interest on sums due before the war to or by 
the nationals of States which have been at war and re- 
covered after the war, such interest shall in the case of 
losses recoverable under contracts of marine insurance 
run from the expiration of a period of one year from the 
date of the loss. 

17. No contract of marine insurance with an insured poes not apply 

to U. S. 

person who subsequently became an enemy shall be 
deemed to cover losses due to belligerent action by the 
State of which the insurer was national or by the allies 
of such State. 

18. Where it is shown that a person who had before i^oes not apply 

/ . . to u. s. 

the war entered into a contract of marine insurance with 

an insurer who subsequently became an enemy entered 
after the outbreak of war into a new contract covering 
the same risk with an insurer who was not an enemy, 
the new contract shall be deemed to be substituted for 
the original contract as from the date when it was en- 
tered into, and the premiums payable shall be adjusted 
on the basis of the original insurer having remained liable 
on the contract only up till the time when the new con- 
tract was entered into. 
Other Insurances. 

19. Contracts of insurance entered into before the war Does not apply 

to U.S. 

between an insurer and a person Avho subsequently became 
an enemy other than contracts dealt with in paragraphs 9 
to 18 shall be treated in all respects on the same footing 
as contracts of fire insurance between the same persons 
would be dealt with under the said paragraphs. 
Be-Insurance. 

20. All treaties of re-insurance with a person who poes not apply 

^ to U. S. 

became an enemy shall be regarded as having been abro- 
gated by the person becoming an enemy, but without 
prejudice in the case of life or marine risks which had 

56 



SXTMMARY OF 

CONTENTS. 



COMMENTS. 



attached before the war to the right to recover payment 
after the war for sums due in respect of such risks. 

Nevertheless if, owing to invasion, it has. been impos- 
sible for the re-insm-ed to find another re-insurer, the 
treaty shall remain in force until three months after the 
coming into operation of the present Treaty. 

Where a re-insurance treaty becomes void under this 
paragraph, there shall be a reciprocal adjustment of ac- 
counts between the i)arties in respect both of premiums 
paid and payable and of liabilities for losses in respect of 
life or marine risks which had attached before the war. 
In the case of risks other than those mentioned in para- 
graphs 11 to 18 the adjustment of accounts shall be made 
as at the date of the parties becoming enemies Avithout 
regard to claims for losses which may have occurred since 
that date. 

21'. The provisions of the preceding paragra])h will Does not apply 
extend equally to re-insurances existing at the date of ° 
the parties becoming enemies of particular risks under- 
taken by the insurer in a contract of insurance against 
any risk other than life or marine risks. 

22. Re-insurance of life risks effected by particular con- Does not apply 
tracts and not under any general treaty, remain in force. 

The provisions of paragraph 12 apply to treaties of re- 
insurance of life insurance contracts in which enemy 
companies are the re-insurers. 

23. In case of a re-insurance effected before the war Does not apply 
of a contract of marine insurance, the cession of a risk 

which had been ceded to the re-insurer shall, if it had at- 
tached before the outbreak of war. remain valid and effect 
be given to the contract notAvithstanding the outbreak 
of war : smus due under the contract of re-insurance in 
respect either of premimns or of losses shall be recoveral)le 
after the war. 

24. The provisions of paragra])hs 17 and l.S and the Does not apply 
last part of paragraph IH shall a])ply to contracts for the 
re-insurance of marine risks. 



SUMMARY OF 
CONTENTS. 



Definition of 
"during the 
war." 



Creation of 
new mixed 
arbitral Tri- 
bunal between 
each allied 
state and 
Germany. 



Jurisdiction of 
Mixed 
Arbitral 
Tribunals. 



ECONOMIC CLAUSES. , COMMENTS. 

Article H. 

For the purposes of Articles A, B, D, E, F and G and Apples to u. s 
Regulations X and Z, the expression "during the war" 
means for each Allied or Associated State the period be- 
tween the declaration of war between that State and Ger- 
many and the date of the coming into operation of the 
present Treaty. 

Article I. 

{(I.) Within three months from the date of the coming Applies to u. s. 
into operation of the present Treaty, a Mixed Arbitral 
Tribunal shall be established between each of the Allied 
and Associated States on the one hand, and Germany on 
the other hand. Each such tribunal shall consist of three 
members. Each of the Governments concerned shall 
appoint one of these members. The President shall be 
chosen by agreement between the two Governments con- 
cerned. 

In case of failure to reach agreement the President and 
two other persons who may in case of need take his place, • 
shall be chosen by the Executive Council of the League 
of Nations, or, until this is set up, by M, Gustave Ador. 
These persons shall belong to countries that have re- 
mained neutral during the war. 

If any Government shall fail, within one month of 
notice, to designate a member of a Tribunal as provided 
above, this member shall be chosen by the other Govern- 
ment from the two persons other than the President 
mentioned above. 

The decisions of the majority of the members of the 
Tribunal shall be the decision of the Tribunal. 

{}).) The Mixed Arbitral Tribunals established by appli- 
cation of paragraph (a) shall decide the disputes which in 
accordance with Articles A, B, D, E, F and G and Regu- 
lations X and Z, are within its competence. 

In addition all disputes, whatsoever they may be, re- 
lating to contracts concluded before the date of the present 
Treaty between nationals of the Allied and Associated 

58 



M. Ador is the 
present presi- 
dent of the 
Swiss Republic. 



ECONOMIC CLAUSES. COMMENTS. 

Htates and German nationals shall bo decided by the 
Mixed Arbitral Tribunal. ah\ays excepting disputes 
which under the laws of the Allied, Associated or Xeutral 
States, are within the jurisdiction of the National Courts 
of those States. Such disputes shall be decided by the 
National Courts in question, to the exclusion of the 
Mixed Arbitral Tribunal. The Allied or Associated 
party may nevertheless bring the case before the Mixed 
Arbitral Tribunal if this is not prohibited by the laws of 
his country. 

Judgments given in all cases which, under the present 
Treaty, they are competent to decide, by the Courts of 
an Allied or Associated State shall be recognized in Ger- 
many as final, and shall be enforced without it being 
necessary to have them declared executory. 

(c.) If the number of cases justifies it, additional mem- 
bers will be appointed so that each Mixed Arbitral Tri- 
bunal may sit in divisions. Each of these divisions will 
be constituted as above. 

(d.) Each Mixed Arbitral Tribunal will settle its own 
procedure, and is empowered to award the sums to be paid 
by the loser in respect of the costs and expenses of the 
proceedings. 

(e.) Each Government will pay the remuneration of 
the member of each Mixed Arbitral Tribunal nominated 
by it and of the agent whom it appoints to represent it 
before the Tribunal. Tfie remuneration of the President 
will be determined by special agreement between the 
govermnents concerned; and this remuneration and the 
joint expenses of each Tribunal will be paid by the two 
Governments in equal moieties. 

(/.) The High Contracting Parties agree to regard the 
decisions of each Mixed Arbitral Tribunal as final and 
conclusive, and to render them binding upon their 
nationals. 



59 



SUMMARY OF ECONOMIC CLAUSES. COMMENTS. 

CONTENTS. 

Aeticle J, 
Enforcement of Wlieiiever a competeiit tribunal has given or gives a ?°" "o* ^pp^y 

decisions of new ^ _ ° ° to TI. S. 

Tribunal. (lecision in a case covered by Articles A, B, D, E, F, or 

G or by Regulations X or Z, and such decision is incon- 
sistent with the provisions of the Articles or Regulations 
in question, the party who is prejudiced by the decision 
shall be entitled to recover compensation which shall be 
fixed by the Mixed Arbitral Tribunal established by 
Article I. 

At the request of the national of an Allied or Associ- 
ated State concerned, the compensation referred to above 
may, whenever possible, be effected by the Mixed Arbi- 
tral Tribunal directing the replacement of the parties in 
the position occupied by them before the judgment was 
given by the German Court. 



Part YI. 

ECONOMIC ('0MMIS8I0X. 

Industrial Property. 



Bestores 
operation of 
certain inter- 
national 
conventions. 



MEMORANDUM BY AMERICAN DELEGATES. 

We have not been able, on behalf of the United States of America, 
to consent to the provisions of Article V, entitled "Reciprocal Am- 
nesty," nor to the provisions of Article VI, referring to "Pre-War 
Licenses." 

As to both of these articles, it is our opinion that their provisions 
conflict with the prmciples of public law and perhaps with the con- 
stitution of the United States, depriving our nationals of property 
rights, without providing for the ascertainment of the value of those 
rights and their due compensation. The provisions of these articles 
also amount to a confiscation of the private rights of German na- 
tionals without compensation, and without the justification inherent 
in a measiu-e taken in the pu])lic interest or for purposes of national 
defence. 

We are unable to concede that the princii)les of international law 
justify the annulment of private contracts relating to industrial prop- 
erty or the annulment of rights of action under such contracts, ex- 
cept for and to the extent required by war measiu-es. Under the 
provisions of Article II, together with the general prmciples of in- 
ternational law, sufficient protection is afforded to provide for acts 
done by the Allied or Associated Powers in the prosecution of the 
war in so far as industrial property rights are concerned. Beyond 
the prt)tection given to the Allied and Associated Powers and their 
nationals by the provisions of Article II, we do not believe that 
rights of action relating to industrial property, or pre-war contracts 
relating to industrial property, should be regarded as differing in 
substance from or requiring different treatment from rights of action 
in general or pre-war contracts in general. 

In accord with our representations, clauses have been mserted 
(Clauses 16 and 20, below) by which these parts of the draft are 
made to have no application as between the United States and 
Germany. 

[Article I. — International ( 'on vent ions.']* 
I The International Convention of Paris, of the 20th tj. s. is not 

L party to 

March, 1883, for the protection of industrial property, Be™<= 

' ' ^ X X- ./ ' Convention. 

revised at Washington in 1911, and the International These matters 

* ' are also dealt 



*Thi8 Article is covered by Article E in Part II relating ( 
of Economic Treaties. 

61 



„ . , . , . with in Part II, 

Revival or Abrogation Art. V. 

Duplications 

to be eliminated. 



SUMMARY OF 
CONTENTS. 



Re-establishes 
industrial prop- 
erty rights. 



Acts of Allies 
under special 
War Measures tc 
remain valid and 
effective. 

Allied Govern- 
ments absolved 
from claims for 
use of German In- 
dustrial Property 
during the war. 



ECONOMIC CLAUSES. 

Convention of Berne, of the 9th September, 1886, for the 
protection of literary and artistic works, revised at Berlin 
in 1908, shall be restored and their provisions shall again 
be put into full force and effect as from the ratification of 
the present Treaty, in so far as they are not affected or 
modified by the exceptions and restrictions resulting from 
the said Treaty .^ 

Article II. — Be-establishment of Rights. 

1. Subject to the stipulations of the present Treaty, 
rights of industrial, literary, and artistic property, as 
defined by the International Conventions of Paris and of 
Berne, mentioned in the preceding article, shall be re- 
established or restored, as from the date of ratification of 
the present Treaty, in the territories of the Allied or 
Associated Powers of the one part and of Germany of the 
other, in favor of the persons entitled to the benefit of 
them at the moment of the declaration of war or their 
legal representatives. Equally, rights which, except for 
the war, would have been acquired during the war in con- 
sequence of an application made for the protection of indus- 
trial property, or the publication of a literary or artistic 
work, shall be recognized and established in favor of those 
persons who would have been entitled thereto, from the 
date of the ratification of the present Treaty. 

2. ^Nevertheless, all acts done by virtue of the special 
measures taken during the war in accordance with the 
legislation, or by the Government of any Allied or Asso- 
ciated Power in regard to the rights of the subjects or 
citizens of Germany shall remain in force and shall con- 
tinue to maintain their full effect. 

3. No claim or action by Germany or German subjects 
or ciUizens shall be permitted in respect of the use during 
the war by the Government of any Allied or Associated 
Power, or by any persons acting on their behalf or under 
their direction, of any rights in industrial, literary or 
artistic property, nor in respect of the sale, offering for 



COMMENTS. 



Restoration is 
subject to 
limitations of 
the following 
clauses: 



62 



economic; clauses. 



COMMENTS. 



to be treated same 

l\'^^l'JT^^'^ soever, made in the course of such use. 

lunds due to oi 

from Geiman Nationals. 



Reserves right 
after war to im- 
pose restrictions 
on German 
Industrial 
Property for 
public interest. 



Transfers 
during war to 
evade special 
measures not 
recognized. 



U. S. legislation 
Covers our funds 
in hand. 



4. Unless the legislation of any one of the Allied or 
Associated Powers otherwise directs, sums due or paid in 
virtue of any act or operation resulting from the execution 
of the special measures mentioned in paragraph 2 of this 
article shall be dealt with in the same way as the other 
sums due to German nationals arc directed to be dealt 
with by the present Treaty; and sums produced by any 
special measures taken by the German Government in 
respect of rights in industrial, literary, or artistic property 
belonging to the subjects and the citizens of the Allied or 
Associated Powers shall be considered and treated in the 
same way as other debts due fi-om German nationals. 

5. Each of the Allied and Associated Powers reserves u°iiat"ai. 
to itself the right to impose such limitations, conditions, 

or restrictions on rights of industrial, literary, or artistic 
property (with the exception of trade-marks) acquired 
before or during the war, or which may be subsequently 
accpiired in accordance' with their l(>gislation, 1)V (Jerman Germany has 

, . . . ' . ' simUar rights 

subjects or citizens, whether by granting licenses, or by by her laws. 
the working, or by the preserving control over their ex- 
ploitation, or in any other way. as may be considered 
necessars' for national defence, or in the public interest, 
or for assuring the fair treatment liy Germany of the rights 
of industrial, literary, and artistic property held in Ger- 
man territory by its nationals, or for securing the due ful- 
filment of all the obligations undertaken by Germany in 
the present Treaty. 



(i. Each of the Allied 



Associated Powers reserves Necessary to 

prevent fraudu- 



tlie right to treat as void and of no effect any transfer of or i^nt transfers 
other dealing with rights of or in respect of industrial, 
literar}', or artistic property effected after the outbreak 
of the war* or in the future, which would have the result 
of defeating the objects of the provisions of this article. 

*[Chang» proposed by American Delegation April 23: "After August 1, 1914"]. 



63 



SUMMARY OF 
CONTENTS. 

Property sold 
by Government 
not thereafter 
subject to 
additional 
restrictions. 



ECONOMIC CLAUSES. 



COMMENTS. 



All defaults in 
formalities 
since Aug. 1, 



may be 



EaA country may 
impose conditions 
to protect bona 
fide intervening 
rights. 



7. The provisions of tliis article siiall not a])])ly to iii- 
(liistrial, literary, or artistic property wliicli has been 
dealt A\ith in the liquidation of businesses or companies 
under war legislation by the Allied or Associated Powers, 
or which may be so dealt with by virtue of the present 
Treaty. 

Article III. — Extension of Time for doin;/ any Acts 
neressorji for Hi'storotio)!. 

1. A minimum of one year after the ratification of the Applies to aii 
pivstMit Treaty shall be accorded to the nationals of the fnfTr^s"" 

. . , . m , • , . , • c i.T Excepts TJ. S. 

sionatones to this Treaty, Avithout extension tees or other interference 

1 , 11 I J !• 1 Proceedings. 

])enalty, in order to enable such persons to accomplish any 
act, fulfill any formality, i)ay any fees, and generally 
satisfy any obligation prescril)ed by the laws or regulations 
of the respective States relating to the obtaining, preserv- 
ing, or opposing rights to, or in respect of, industrial 
property either acquired before the 1st August, 1914, or 
which, except for the war, might have been acquired 
since that date as a result of an application made before 
the war or during its continuance, but nothing in this 
article shall give any right to reopen interferem-e proceed- 
ings in the United States of America where a final hearing 
has taken place. 

2. All rights in, or in respect of, such property which German rights 
may have lapsed by reason of any failure to accomplish conditions applied 
any act, fulfill any formality, or make any payment, shall 
revive, but subject in the case of patents and designs to 
the imijosition of such conditions as each Allied or Asso- 
ciated State may deem reasonably necessary for the pro- 
tection of persons who have manufactured or made use of 
the subject-matter of such property while the rights had 
lapsed. Turther, where rights to patents or designs be- 
longing to German nationals are revived under this article, 
they shall be subject to the same provisions as would have 
been applicable to them during the war, as well as to all 
the provisions of the present treaty. 



during the war. 



64 



Priority of the 
International 
Convention 
extended during 
war and six 
months after. 



JIuure to'exploit" '^- '''^1^^ I't'l'iod IVoill the Ist AllgUSt, 11)14, lllltil thc YaH- AppUes equally 

during the war. |i,.,t[oj^ ^f ^^^ ^^^.^^^^^^^ rj.^^^^^ ^j^^„ ,^^ ,,^^.^j^,^,^, Jj^ ^^j^_ ^ ^•'"" ""' 

.siflerjng- the tune within which a patent shouhl he Avorked 
or a trade mark or design used, and it is further agreed 
that no patent, registered trade mark or design in force 
on the 1st August, 1914, sliall he suhjcct to revocation or 
cancellation hy reason onl.y of the failure to work such 
patent or use such trade mark or design for two years after 
the ratification of the present Treaty. 

Article IV. — Bights of Pviovitij under the Convention. 

1. The rights of priority provided hy Article lY of the ^pp^es to aii 

T A J.' 1 /-< • P signatories 

international Convention for the Protection of Industrial i"*" ^«- 
Property of Paris, of the 20th March, 1883, revised at 
Washington in 1911, or hy any other Convention or 
Statute, for the filing of applications for patents, and for 
the registration of trade marks and designs and models of 
utility which had not expired on the 1st August, 1914, 
and those which have arisen during the war, or would have 
arisen hut for the war, shall he extended by each signatory 
in favor of all nationals of the other signatories to this 
Treaty for a period of six months after the ratification of 
the present Treaty. 

2. Nevertheless, such extension shall in no way affect 
the right of the (lovenmient of any State or of any person 
who before the signature of this Treaty was bona fide in 
possession of any rights of industrial property conflicting 
with rights applied for by another w^ho claims rights of 
priority in respect of them to exercise such rights by himself 
personally, or l)y such agents or licensees as derived their 
rights from him before the signature of this Treaty ; and 
such persons shall not be amenable to any action or other 
process of law in respect of infringement. 



Protection of 
all bona fide 
third persons 
having inter- 
vening rights. 



SUMMARY OF 
CONTENTS. 



Cancels all 
rights to sue 
for infringements 
committed 
during the war. 



E(;ONOMIC CLAUSES. 



COMMENTS. 



Article V. — Special Eestrictions on Right of Actio?}, in 
Begard to Industrial Property. 

1. No action shall be brought and no claim made by ^of accept 



Immunity as to 
sales of infring- 
ing articles ex- 
tended 1 year 
after the war. 



tories of Germany on the one part and of the Allied or 
Associated Powers on the other, or persons who are subjects 
or citizens of such Powers respectively, or by any one 
deriving title during the war from such persons, by reason 
of any action which has taken place Avithin the territory of 
the other party between the date of the declaration of war 
and that of the signature of this Treaty, which might 
constitute an infringement of the rights of industrial prop- 
erty or rights of literary and artistic property, either ex- 
isting at any time during the war or revived under the 
provisions of Articles III. and IV. 

2. Equally, no action by such persons shall at any time 
be pemiissable in respect of the sale or offering for sale 
for a period of one year after the signature of this Treaty 
in the territories of the Allied or Associated Powers, on 
the one hand, or Germany on the other, of products or 
articles manufactured, or of literary or artistic works 
published, during the period between the declaration of 
war and the signature of this Treaty or against those 
who have acquired and continue to use them. It is 
understood, nevertheless, that this provision shall not 
apply when the possessor of the rights was domiciled 
or had an industrial or commercial establisliment in the 
districts occupied by Germany during the war. 

3. As between the United States of America on the one 
hand, and Gemiany on other, this Article shall have no 
effect. 

Article VI. — Pre-War Licenses. 
Cancels all pre- 1. Liceuses in respect of industrial, literary, or artistic 

war licenses. -■- ^ j ^ 



accepted by 
1. See 
memorandum. 



Right to renew property concluded before the war between nationals of 

on terms fixed i a ii- 

tiibS Allied or Associated Powers or persons residing in 

their^ territory or carrying on business therein, on the 



ae 



SUMMAKY OF 
CONTENTS. 



ECONOMIC CLAUSES. 



COMMENTS. 



Pre-war licenses 
to have no 
effect on those 
granted by 
Governments 
during the war. 



Royalties paid 
on pre-war 
licenses during 



one part, and the subjects or citizens of Germany, on the 
other part, shall be considered as cancelled as from the 
date of the declaration of war between Genuany and the 
Allied or Associated eountiy. But, in any case, the 
former benificiary of a contract of this kind shall have the 
right, within a ])eriod of six months after the ratification 
of the present Treaty, to demand from the ])roprietor of 
the rights the grant of a new license, the conditions of 
which, in default of agreement between the parties, shall 
be fixed by the duly qualified tribunal in the country 
under whose legislation the rights had been acquired, 
except in the case of licenses held in respect of rights 
acquired under Gennan law. In such cases the conditions 
shall be fixed by the ]\[ixed Ar))itral Tribunal referred to 
in Article I, Part V, of the present Treaty. The tribunal 
may, if necessary, fix also the amount which it may deem 
just should be paid l)y reason of the use of the rights 
during the war. 

2. No license in respect of industrial, literar-v , or artistic Reciprocal. 

, "^ Refused by U. S. 

property, granted under the special war legislation of any see memoran- 
Allied or Associated country, shall be affected by the con- 
tinued existence of any license entered into before the 
war, but shall remain valid and of full effect, and a license 
so granted to the former beneficiary of a license entered 
into before the Avar shall be considered as substituted for 
such license entered into before the declaration of war if 
granted to the former beneficiaiy. 

3. A\Tierc sums have been paid during the war by virtue Not accepted by 
of a license or agreement concluded before the war in memorandum, 
respect of rights of industrial property or for the repro- 
duction or the representation of literary, dramatic, or 

artistic works, these sums shall be dealt with in the same 
manner as^other debts or credits of German nationals as 
provided by the present Treaty. 

4. \^s between the United States of America on the one 
hand, and Germany on the other, this Article shall have 
no effect. 



67 



SUMMARY OF ECONOMIC CLAUSES. COMMENTS. 

CONTENTS. 

Article VII. — Rhjhls in Separated Tprritorles. 

fwned^bri'n"*^ The exlstliig ihliabitauts of territories separated from 

detached terri- Genuaiiy by virtue of the present Treaty shall, notwith- 

twyo remain standing tliis separation and the change of nationality 

consequent thereon, continue to enjo}^ in Germany all 

the rights in industrial, literary, and artistic property to 

which thev were entitled under German legislation. 



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